I suspect we're still trying to find some type of consolidation range and just simply waiting to see if the war gets any worse. With this, a market moving event has to be in the back of the minds of traders.
Gold
The gold market rallied early on Friday to stabilize again with the $5,200 level opening up a potential resistance barrier. All things being equal I think short-term pullbacks offer buying opportunities and clearly this was somewhat US dollar driven and with some of the mixed numbers coming out of the labor market in the United States I think you've got a situation where people just don't really know what to do in the short term.
Geopolitics and Consolidation in the Gold Market
But that being said market participants I think continue to watch the $5,000 level for support and if we were to break down below then it could open up a move down to the 50-day EMA. As we go into the weekend though it's very likely that a lot of traders want at least some exposure to gold just in case after all who knows what kind of headlines could cross the wire.
So, with this I think this move makes perfect sense. I suspect we're still trying to find some type of consolidation range and just simply waiting to see if the war gets any worse. If we break down below the 50-day EMA it opens up a move down to the $4,600 level. Anything underneath there would be really bad for gold but I just don't see that happening. The $5,500 level will end up being a significant ceiling but breaking above there really gets things going to possibly reach $6,000. In the meantime, I think it's very much headline dependent, and therefore a very difficult market to trade at the moment.