- Gold markets have fallen hard during the trading session on Friday, showing that we are in fact ready to go even lower.
- The market tried to recover during the day on Thursday but has given back all of the recovery and at this point, it looks very likely to continue to see further downward pressure, as the US dollars like a wrecking ball for the gold market.
- Gold has also seen a lot of trouble when it comes to the overall interest-rate situation in the United States that continues to climb.
Is the Gold Market in a Downtrend?
At this point, I suspect that the market has quite a ways to go to the downside in order to find some type of bottom. The $1600 level is a very realistic target at this point, perhaps even down to the $1500 level of the longer term. Rallies at this point continue to be nice selling opportunities as the 50-Day EMA is starting to go much lower, and therefore you can see that it is a bit of a downtrend line in and of itself.
The $1750 level above is a bit of a resistance barrier and therefore if we were to break above it, then it would be very bullish sign. The market then will perhaps shift attitudes and perhaps shift the overall trend. Obviously, there would have to be some type of major shift in momentum and of course the Federal Reserve in order to make that happen. I think short-term rallies continue to be selling opportunities at the first signs of exhaustion.
Looking at the chart, we have been in a nice grind lower, and I think that continues to be the case as the US dollar continues to see plenty of interest. There is a major shortage of US dollars around the world, therefore we will continue to see the US dollar strengthen and punish gold itself. The interest rates have been rising for quite some time and it certainly looks like the market is pricing even more aggressive behavior coming out of the Federal Reserve. I have no interest in trying to go long anytime soon, unless of course the central bank attitude coming out of Washington DC changes. There’s almost no chance of that happening as inflation still rages in the United States.
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