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Gold Markets Technical Analysis
Gold markets are somewhat noisy during the early hours on Wednesday, as we continue to see a lot of noise in this general vicinity. All things being equal, the market is likely to continue to see a lot of confusion in this area, however, let’s be honest here, there is a significant amount of pressure to the upside on the gold market from the longer term perspective, mainly due to the fact that the US dollar, of course, has been shrinking, but we’ve also seen a lot of questions asked about the idea of whether or not the Federal Reserve will be cutting rates later this year. If they do, that’s typically good for gold.
The $2,900 level does seem to be a little bit of a magnet for price in this general vicinity. But if we can break just a little bit higher, maybe $2,933, then it kicks off the flag and we will go looking to the $3,000 level first. But the measured move of the flag suggests that we are going to go looking to the $3300 level. Short term pullbacks could drop all the way to the 50 day EMA without changing much and that is closer to the $2835 level. So, I think we’ve got a little bit of a cushion here, but it also looks like we are compressed. These compression areas typically lead to explosive moves in continuation, but we’ll have to wait and see whether or not we get that in an impulsive candlestick that tells us that buyers are jumping back in to get aggressive about it.
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