Gold Market Technical Analysis
Gold has rallied a bit during the trading session on Friday but gave back some of the gains to show signs of exhaustion. The 200-Day EMA sits just above and causes a bit of resistance as you can see and asks questions of the overall trend. With that being said, it’s very likely that we continue to see noisy behavior and volatility.
It’s probably worth noting that the liquidity would’ve been a major problem during the trading session on Friday as a lot of the larger firms will have walked away from work for the week heading into Thanksgiving. Because of this, I would not read too much into the last 2 days, so at this point the easiest way to read this chart is to look at it through the prism of moving averages.
The 200-Day EMA above being broken to the upside could send the market higher, perhaps trying to take out the trendline and then eventually $1800. On the other hand, if we turn around and break down below the 50-Day EMA it’s likely that the market could go down to the $1680 level, where we had formed a bit of a “W pattern” previously.
Pay attention to the interest rate markets, because they do have a strong negative correlation to what happens in the gold market, so that should always be in the back of your mind. I do expect to see a lot of choppiness this week, and a lot of people will more likely than not take a look at the jobs number on Friday as a sign of what the Federal Reserve may be able to do as far as loosing monetary policy is concerned.
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