Gold Technical Analysis
The gold market has found itself to be a little bit positive during the trading session on a short Monday session, as it was Memorial Day in the United States, and of course, holidays in Europe added to the lack of volume. That being said, it’s probably worth noting that most of what we’re seeing here is a reaction to the headlines coming out of the Middle East that maybe possibly somehow there might be an agreement.
Unfortunately, this is something that we have seen more than once, and I think this is a scenario where traders are going to have to look at this as possibly a buy on the dip setup. I mean, we’re here near fairly significant support, but you also have to look at the idea of the market rallying from here with a bit of a grain of salt. I think it probably does, but I’m not looking for massive moves, at least not yet.
If we can get interest rates in America to drop significantly, that could be the beginning of a pretty significant run higher in the gold market. But as long as they are relatively strong, it does put a little bit of a damper on what gold can do.
Technical Support and Key Averages
The 50-day EMA at $4,687 above current pricing offers a bit of a short-term ceiling. A pullback from here could test the 200-day EMA, but if we were to drop below that level, I think gold is in real trouble. Watch the 10-year yield. It does have a strong negative correlation.
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