Gold Technical Analysis
The gold market has jumped quite a bit after gapping lower at the open on Thursday. We continue to see a lot of noise coming out of the interest-rate markets, and that, of course, has a major influence on the gold market. After the Federal Reserve raised rates and sounded like another rate hike is coming, we’ve seen the Bank of England do nothing, and the Bank of Japan is on board next.
The $4,500 Level Above Could Be a Bit of a Barrier
At this point in time, it looks like gold is trying to recapture some of its former mojo, but we’ve been in a range for a while. I don’t know if that changes anytime soon. The 50-day EMA is in focus at the moment. We are back above that early on Thursday, but it is flat, and so is the 200-day EMA.
Ultimately, I am bullish on gold longer term because of the debt issue around the world, but the market is more likely than not paying attention to the fact that U.S. interest rates have dropped a little bit during the session, with the 10-year backing away from that crucial, psychologically important 5% level.
All things being equal, this is a market that looks as if it is trying to re-enter the consolidation it had been in for most of the last six weeks or so, with the exception of that one little bullish sprint that we had. This is a market that’s been hanging around in this vicinity. I think it is supported, but I also recognize that it still lacks a bit of momentum.
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