Gold Technical Analysis
The gold market has looked a bit noisy during the overnight session just chopping back and forth without any real clear momentum one way or the other. This is a market that rallied quite nicely on its way up here, and it’s probably worth noting that market participants continue to look at the $3,500 level as a major ceiling. By extension, the market also looks at the $3,200 level as a major floor and it’s been that way for a while now.
So ultimately, I think you do have a scenario where traders are looking at this as a range that may be getting ready to break. We just don’t know, but I also recognize that the market probably needs some type of catalyst because, quite frankly, it’s summertime. Summertime is typically pretty quiet and a lot of times the volume just isn’t there.
So, I’m watching this very closely to see how that plays out. But I do recognize that we are in an uptrend from the longer term standpoint. And that of course has a major influence as to what you expect to happen.
Quite frankly, what you would expect to happen next is a move to the upside. Breaking above the $3,500 level and taking the measured move into account may send us to the $3,800 level. The US dollar is struggling a bit, which does help gold, so that might be the catalyst. We’ll just have to wait and see, but do be aware of the fact that we are most certainly coming close to significant resistance.
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