- In today’s gold analysis, we can see that there is a certain amount of support underneath.
- I do believe that the 50 day EMA is going to offer at least minor support, as we have seen during the Friday trading session.
- However, I think it's much more important to pay close attention to the $2,300 level as well because that's the beginning of the significant support level that has kept this market somewhat elevated for some time.
If We Can Rally…
If we can continue to go higher from here, then the $2,350 level would be your next target, followed by the $2,400 level. The $2,400 level, of course, is a large, round, psychologically significant figure that people will be paying attention to. It has offered quite a bit of pushback in the recent past.
Over the last couple of months, we have seen gold market participants basically looking at this through the prism of working off a lot of excess froth. The one reason that we have stalled beyond that might have just been the fact that it's summer and there isn't a whole lot of trading going on. However, I do believe that the geopolitical situation still favors gold overall, if for no other reason than the fact that central banks are out there buying it. But we have hot wars everywhere, and recently we've even seen an attempted coup to tie in Bolivia, as well as deadly rioting in Kenya around the government. So, tensions are spreading. We also have the issues in the Middle East and Ukraine.
So, there are a whole litany of reasons for traders to have a bit of gold in their portfolio in order to protect their wealth. Even if we were to break down below the $2,280 level, which I see is the bottom of the support range, there is enough support near the 200 day EMA and the $2,150 level, I believe, at least to keep the market afloat and keep the trend positive.
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