Gold Technical Analysis
Gold dropped a bit during the trading session on Friday in the early hours as we continue to see a lot of back and forth. But quite frankly, I think it’s very difficult to get short of gold, mainly due to the fact that there are so many massive geopolitical issues right now. The Iranians and Israelis trading missiles is one thing, but we also have the Ukrainian war as well. And beyond that, we have a ton of concerns when it comes to global trade. Beyond all of that, you also have central banks out there collecting gold and buying as much as they can, causing the market to have a “large and permanent buyer.”
So, with this being the case and the fact that the trend has been so strong for so long, there’s really no reason to think about shorting this market. I believe that there is a certain amount of short-term support here at the $3,300 level with the 50-day EMA hanging around in that area. If we break down below there, then the $3,200 level gets targeted. To the upside, the $3,500 level is a large, round, psychologically significant figure in an area where we’ve seen a lot of pushback. If we can break above there, then you take the measured move and you expect a $300 gain, eventually, which sends gold looking to the $3,800 level. Sooner or later, personally, I think that makes quite a bit of sense.
