SPDR Gold Trust (GLD)

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Gold Markets Continue Consolidation
By: Christopher Lewis | January 11, 2022

• Gold markets have rallied a bit during the trading session on Tuesday, as we seem stuck in a larger consolidation area.

Gold markets have rallied a bit during the trading session on Tuesday as we await the Jerome Powell testimony in front of Congress, but quite frankly at this point in time it looks like we are simply willing to go back and forth overall, and I do think that continues to be the case going forward. The $1830 level to the upside is significant resistance, and perhaps a target if we become more bullish. To the downside, we have the bottom of the Friday candlestick at the $1780 level that continues to offer support. Because of this, I think it is a situation where we will continue to see a lot of back-and-forth trading from the longer-term standpoint.

Looking at this chart, you can see that the 50 day and the 200 day EMA indicators are essentially flat, Lindy more credence to the idea of a sideways market. It is also worth noting that these indicators are hanging about the $1800 level, which of course is a large, round, psychologically significant figure and in and of itself will probably attract a certain amount of attention. Nonetheless, this is a market that I think is going to stay within the range that we have seen for a while, unless of course something happens in the bond market to make people go crazy again.

That is completely possible, as higher interest rates can often work against gold, especially if it becomes cheaper to simply hold paper and we get closer to positive real rates. If that were to happen, that will kill gold but right now I think gold is more likely than not going to continue to find buyers on dips going forward.

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