Gold Price Pullback Puts $4,500 Support in Focus

Gold Technical Analysis

The gold market has fallen a bit early during the trading session here on Wednesday, as the $4,700 level continues to offer a little bit of resistance. The market has been a little stretched recently, and with core PCE coming out as expected, there was not that catalyst early in New York trading. That being said, we do get a speech by Kevin Warsh, the Federal Reserve governor at Jackson Hole on Friday, that could determine what the next move is, or at least give us hints by the Federal Reserve.

Profit-Taking and Key Support at $4,500

The market being a little stretched means that a pullback makes a certain amount of sense. I do think that the $4,500 level will continue to be important, mainly based on market memory, as it had been resistance previously. I suspect a lot of value hunters might be interested in buying the market down there. If gold were to break above $4,800, that’d be a major breakout.

But with rates elevated the way they are and so many questions about what the Federal Reserve may or may not do, I don’t know what the catalyst would be for the next day or two. This might just be a little bit of an opportunity for profit-taking for those who have bought gold recently and realized pretty decent gains, so be aware of that. I don’t necessarily think gold is bearish by any stretch, but I also recognize that it would make a certain amount of sense for those who have been so positive here to trim their positions and reduce risk here.

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