Gold Technical Analysis
The gold market has been slightly positive during the trading session here on Tuesday, which makes a certain amount of sense because, quite frankly, rates dropping gives us a little bit of pressure relief. We’re in a demand zone, or just right on top of it, between $4,200 and $4,000, going back quite some distance in time. Therefore, it’s not a huge surprise to see that there’s at least some interest in this area.
Lower Rates Are Starting to Help
Coupled with the lower rates, the positive momentum makes a certain amount of sense. Gold does look like it’s in an area that maybe, if it gets a little bit of help via lower rates, which would be a result of the situation in the Middle East calming down, we would have a little bit of a bounce here, maybe towards the 200-day EMA. We’ll just have to wait and see. That’s typically an area that a lot of people watch.
The $4,400 level is also resistance above, so that could be an area of interest for certain traders. Underneath, if we were to break down below the $4,000 level, that would be a major change in attitude and something that would certainly catch my attention. This is a situation that I do not expect, but one I am aware of.
Longer term, I do like gold. There is plenty of spending out there that could have people looking to run to gold for safety. All things being equal, this market is one that I like. Longer term, short term, though, I think we’re still at the mercy of the bond market and somewhat sideways.
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