Gold Price Eyes $4,800 Breakout as Jackson Hole Decision Looms

Gold Technical Analysis

The gold market has been very noisy during trading here on Friday, but in a relative tight range. It doesn’t surprise me much, considering that we are waiting on a speech by Kevin Warsh at the Jackson Hole Symposium later that could give traders an idea as to what the Federal Reserve may do going forward.

After all, the markets are trying to price in the idea that the Federal Reserve won’t be raising rates later this year, and if that is going to be the case, then it makes a lot of sense that the traders will have to see some type of certainty, as this idea of no more interest rate hikes this year is fairly new one. At one point, we had 2 hikes priced in.

We continue to get a little bit of noisy economic data, but at the same time, we have to worry about the Middle East and energy inflation, so this will be an interesting one. Nonetheless, gold looks good, and I do like gold long term, but that doesn’t mean that it has to take off here.

Technical Levels and Policy Inflection

To me, from a technical analysis standpoint, a clearance of the $4,800 level would be crucial to really get the upside going. We’ve recently had the so-called golden cross with the 50-day EMA breaking above the 200-day EMA, so that’s a good sign as well.

But a pullback to the $4,500 level is a very real possibility as well, especially if Warsh sounds more hawkish than people anticipate. We are at a major point of inflection, so this is a market worth watching late today.

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