Gold Technical Analysis
The gold market has rallied a bit during the early part of the trading session here on Friday, as markets continue to pay close attention to interest rates, but they also tend to behave as range-bound and recognize that there is an area underneath that provides quite a bit of support. The $4,300 level has been important for quite some time, and that does not look like it is going to change anytime soon.
To the upside, the $4,500 level is a significant amount of resistance. At this point, we could even say that the market is compressing down to a $100 range between $4,300 and $4,400. This is a range that is tightening, so a move could be coming soon.
High Interest Rates Continue to Be an Issue
Either way, the extraordinarily high interest rates have a part to play here, and given enough time, they do cause a bit of downward pressure. Nonetheless, there are central banks buying gold and putting a bit of a bid underneath it.
From a longer-term perspective, gold does offer a little bit of a safe haven, but at the same time, you have those energy inflationary concerns showing up in the bond market that make it a little less attractive than it should be.
Longer term, I do like gold. I just think that, in the short term, we are kind of stuck in this range, especially as we go into the weekend. This is a market I like, but right now it isn’t an easy one to hold onto.
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