Gold Technical Analysis
The gold market initially fell during the week as we had several central banks to deal with, not least of which was the Federal Reserve and the fact that Kevin Warsh sounded much more hawkish than anticipated. That really drove prices down.
Since then, we have seen the Bank of England stay pat and the Bank of Japan raise interest rates by 25 basis points, while sounding a little less confident about going much further than that than I think a lot of the market anticipated. As a result, we have seen the gold market recover nicely.
The 50-week EMA Has Offered Support
The 50-week EMA has offered support. It is a market that had, until recently, been in a massive uptrend. So at this point, it looks like we are trying to recapture some of that momentum.
The $4,500 level just above seems to be the next target or possible resistance barrier, depending on how we look at it. The 50-week EMA, right around the $4,300 level, has offered support so far, and that is an area I would be watching for potential support or a breakdown below it.
If we break down below there, we do have a trend line just below that could come into the picture as well. Ultimately, rates hovering as high as they are work against gold, but it is starting to turn things around. So we will see if the bond market follows this attitude, or if it has another round of problems to give the market.
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