Gold Price Analysis – Gold Tests 200-Day EMA as Rectangle Breakout Emerges

Gold Technical Analysis

The gold market has rallied to break out to the upside of a rectangle that it had been in for a while on Wednesday in early trading. The question now is: can we stay above the 50-day EMA, and will the market close above this rectangle at the end of the session?

That would certainly be attractive to buyers, so we’ll have to wait and see how this plays out. Keep in mind the interest rates will have their part to play, and of course the situation in the Middle East, which is still fluid, as the Americans suggested that there was some type of deal coming while the Iranians said any deal’s on hold while the US continues to threaten them. In other words, more of the same.

Elevated Interest Rates and 200-Day EMA Present Resistance

So, it is because of this that I’m not willing to jump in and just start buying gold hand over fist, although this is the first strong signal that we could remain bullish. The 200-day EMA sits just above as well, so technical analysis would suggest a little bit of noise in this area regardless.

So, taking my time is how I plan on playing this market, looking for value. I do like gold longer term; I’ve said that all along, but I also recognize that as long as interest rates remain somewhat elevated, it might be a little bit difficult to get aggressive in the gold market to the upside. That being said, eventually all things come to an end, and maybe this situation will, and the gold market could continue its overall uptrend. We’ll just have to wait and see. The size of the candle so far is pretty impressive; we’ll have to see how that plays out as well, but ultimately a little bit of patience probably goes a long way here.

If you’d like to know more about how to trade gold and silver, please visit our educational area.