Gold Technical Analysis
The gold market has dropped fairly significantly during the early hours on Thursday as the overall consolidation area continues to play out. The $4,000 level on the bottom has been support, with the $4,200 level on the top being resistance.
Ultimately, this is a market that is likely to continue to be very noisy and choppy, but I also recognize that there are a lot of things going on outside of the actual market itself that have a certain amount of influence. This includes, of course, the higher interest rates in the United States, which, as interest rates rise, a lot of times that can cause issues for gold.
Macro Headwinds and Technical Death Cross Weigh on Gold
And the energy shock that’s being priced into the bond market has people running from anything remotely close to risk at times. The 50-day EMA broke down below the 200-day EMA a couple of weeks ago, kicking off the so-called death cross. That is a technical indicator that a lot of people will look at with suspicion, and this is typically something that longer-term traders look at as a very bearish turn of events.
Whether or not that actually plays out remains to be seen, but what does look fairly obvious at this point in time is that we have been in a range for a couple of weeks and have not been able to break out of this $200 area. This area continues to be noisy in general, and an area that short-term traders will continue to be active in, but longer-term traders will be trying to find some kind of bigger answer to bigger questions.
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