Gold Technical Analysis
The gold market has gapped lower to kick off the trading session here on Wednesday, rising enough to fill the gap, and now it looks like we are questioning whether or not we have the appropriate amount of momentum.
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See all Gold forecastsKeep in mind that interest rates continue to climb in America, and that, of course, is a major problem for gold. Given enough time, historically speaking, interest rates tend to be a bit toxic for gold. It’s cheaper to simply buy paper and hold it than it is to store large amounts of gold.
Furthermore, we also have to keep in mind that there are several central banks in play and could be raising rates. We’ll just have to wait and see. There is a pushback on the side of the safety bid. There is some of that, and that does help gold.
Longer Term, I Am Bullish on Gold
Longer term, I am bullish on gold, but I also recognize that right now we have the European Central Bank decision on Thursday, PPI on Thursday, CPI on Friday coming out of the United States, and the Federal Reserve on Wednesday of next week, with the Bank of Japan on Thursday.
So there’s a lot going on that could move the gold markets, and it does not surprise me that perhaps we may take a moment here and simply grind away. I look at this as a market that has a reasonably well-defined range between $4,500 on the top and $4,600 as your outer barrier, with $4,400 as your floor.
You can see that we have broken above $4,500 for a moment, but I think that’s a resistance zone at this point. Markets get a little ahead of themselves. People start to take profit with so much uncertainty. There is certainly an underlying bid to the gold market, but momentum is still hard to find.
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