Gold Price Analysis – Gold Rises on Lower Rates

Gold Technical Analysis

The gold markets have been very bullish during the early part of the Wednesday trading session testing the $4,600 level as we gapped higher after reports came out that the United States and Iran are starting to talk. The 15-point peace plan that Iran has received certainly helps the idea that at least there’s some hope to the war ending fairly quickly.

Technical Support and Geopolitical Drivers

The markets clearly are looking for some type of peace settlement, and with the rates in America dropping, that makes gold a little bit more attractive. Whether or not gold takes off from here really comes down to the warring parties, would be my guess, but there’s a whole slew of issues to worry about. If we can get rid of energy inflation issues, which is what that would do in theory, at least, then we have to worry about the other forms of inflation, but as things stand right now, this was a perfect hammer right at the 200-day EMA and a bounce, which will have caught the attention of many traders.

So far, so good, but I think it’s still early, and of course, one bad headline really could ruin any type of recovery. If we turn around and break down below the hammer from the Monday session, that would be disastrous. I don’t think that happens, but it is something that you need to keep in the back of your mind. As things stand right now, as long as there’s progress towards peace, gold probably remains somewhat bullish.

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