SPDR Gold Trust (GLD)

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Gold Markets Reach the 50-Day EMA
By: Christopher Lewis | July 12, 2023

• Gold markets have rallied a bit during the early hours on Wednesday, as CPI numbers in the United States came out lower than anticipated. Because of this, the market is likely to continue trying to reach higher.

Gold Market Technical Analysis

Gold markets have rallied a bit during the trading session on Wednesday, as it looks like the 50-Day EMA is coming into the picture to offer a bit of resistance. If we can break above there, then the market is likely to go much higher, perhaps reaching the 200-Day EMA. It’s worth noting that CPI numbers in the United States came out lower than anticipated, so that of course does have a negative effect on the US dollar, which in the end also helps gold as the 2 are somewhat negatively correlated most of the time. With that being the case, I think you continue to see more of a “buy on the dip” situation in this market, as the 61.8% Fibonacci level and the 200-Day EMA indicator have both offered support as well.

If we were to break above the $2000 level, that would be a major breach of resistance, and would almost certainly bring a lot of people into the local market to chase it higher. On the other hand, if we were to break down below the 200-Day EMA, then it’s likely that we would see the market really unravel, breaking through the $1900 level, and then down to reach the $1800 level, where the market had taken off from previously. If it were to break down below there, it would be the absolute end of the uptrend in gold. While I don’t necessarily see that happening, that is the longer-term “nightmare scenario” for the gold bulls.

I anticipate that we will have more upward pressure than down, but we also have to keep in mind that it will be noisy and there is a lot of previous action just above current pricing, so I think it will cause a few headaches along the way. That doesn’t necessarily mean that the market is going to suddenly turn around, but I do think that the occasional pullback is very likely as we try to break out to the upside. Gold has been choppy for a while, but it looks as if it is starting to turn the corner.

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