The gold market has rallied slightly during the trading session here on Thursday as the headlines in the Middle East and the interest rate markets continue to play a major part.
Gold
The gold market has rallied slightly during the trading session here on Thursday as we continue to see a lot of noisy behavior in general. All things being equal, this is a market that I think sees a lot of questions asked about whether or not it can continue the upward momentum. At this point, it has a lot of struggle ahead from what I can see.
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The $4,200 level would be a potential barrier. If we can break above there, it could open up the possibility of an even bigger move towards the 200-day EMA. The 200-day EMA is going to be what I think ends up being a significant barrier. This is still the ceiling as far as I can tell.
Technical Resistance Zones and Downside Support Levels
To the downside, the market is likely to continue to see the $4,000 level offer a floor, and I think this $4,000 level is also more of a range, it extends down to the $3,900 level. Anything below $3,900 opens up a drop to the $3,500 level. At that point, $3,500 is an area that has been important multiple times, and I do think that this is a market that, more likely than not, we're going to see a lot of choppiness.
I do think that the higher interest rates and the stronger US dollar will continue to work against the value of gold. Therefore, I think we have to look at this as a fade the short-term rally type of scenario. This is a market that I think has a lot of work to do in order to change things around.
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