Gold Technical Analysis
The gold market has firmed up just a little bit after the CPI numbers in the United States came out basically as anticipated. With that being the case, it does make a certain amount of sense that gold is breathing a sigh of relief. But when you look at the longer term chart, we’ve been in an uptrend for some time anyway, so it’s not a stretch to imagine that gold will eventually find its way higher. All things being equal, this is a market that I think will try to go looking at the $3,500 level. And if we can break above there, that would obviously be very bullish.
With this being the case, I like the idea of buying a breakout or buying short-term pullbacks because I do believe that there are plenty of reasons for gold to continue going higher. The 50 day EMA is right at the $3,358 level. And if we can break down below there, then the $3,200 level is your next support level. Gold has been ranging for a few months now, but really at this point in time, it is a scenario where we are doing everything we can to find reasons to rally.
I recognize that it is a very choppy and noisy market at a very quiet time of year. Keep in mind that the volume in the month of August tends to be very quiet. And with that, I think you have to be very cautious with the idea of jumping into a huge position. Either way, it’s a one way trade from what I can see, and really at this point, it almost looks like an ascending triangle.
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