We would need to recapture all of the real estate given up on Tuesday this week to show a significant change in attitude.

• Gold markets initially shot higher on Friday but gave up gains again.
• The price seems unable to hang onto positive momentum.
• At this point, the market looks as if any rally will be sold into.

But even if we do rally from here, I would anticipate that there is a lot of resistance at the $1800 level as well, which is an area that has been imported multiple times in the past, as well as an area that carries a lot of psychology attached to it.

If we were to break down below the lows of the last couple of days, then it’s possible that the market could go looking to the $1700 level underneath, which is the next major, round, psychologically significant figure. Keep in mind that the US dollar has a directly negative correlation to gold markets most of the time, and interest rates most certainly do. As interest rates continue to climb in the United States, that will have a negative effect on gold.

Bounce Expected, But Will Gold Recover?

That being said, I would anticipate some type of bounce sometime soon, as we had fallen apart so rapidly. The alternate scenario is that we simply go sideways, which is an even more bearish turn of events because it shows that nobody’s really willing to step in and pick this market up. If interest rates in America continue to climb the way they have, it’s very difficult to imagine how gold will do well. With that being the case, I like the idea of fading rallies more than anything else, but I would short the market if it broke down from here.

As far as the market changing its overall attitude, we would need to recapture all of the real estate given up on Tuesday this week to show a significant change in attitude. If and when we get that, then the market will have to deal with the 50-day EMA as well as the 200-day EMA. In other words, it’s going to take a lot of effort to recover from here. The biggest driver will be expectations coming out of the Federal Reserve, which right now looks likely to be very tight going forward, thereby putting the interest rate pressure on the gold market in general.

I think that we have a scenario in which it’s almost impossible to get long of the DAX.

The German DAX Index initially tried to rally Tuesday but saw plenty of sellers jump back in, just as we had seen on Monday. The €13,250 level is an area that continues to be important, as we have seen this market bounce from there, break down from there, and see multiple reactions.

If we turn around and break above the €13,500 level, then it’s possible that we could reach to the €13,750 level, which is where the 50-day EMA is sitting just above. The 50-day EMA is an indicator that a lot of people will pay close attention to, as the indicator is used in a lot of technical trading systems. Ultimately, this is a market that continues to fade rallies, and I think it’s likely that we will see plenty of sellers jump into this market and take advantage of the first signs of selling pressure and exhaustion.

On the downside, the €13,000 level would be an area of psychological support, and if it can break down below there is likely that we would see the €12,500 level targeted, as we had bounced from there previously. Because of this, if the market would break down below there, it would open up a “trapdoor effect” in the market and at that point, it’s hard to tell where we woudl end up.

Alternately, if we were to break above the 50-day EMA, then it’s possible that the market could go looking to reach the €14,000 level, possibly even the 200-day EMA which is currently sitting at the €14,500 level. It’s not till we break above that level that I think the trend could change, but even then I would be suspicious. After all, we need to know what central banks are going to do, as they look like they are all getting ready to tighten. If that’s going to be the case, then stocks will more likely than not pay the price. There are a lot of concerns about inflation and global slowdowns out there, so I think that we have a scenario in which it’s almost impossible to get long of the DAX, but I could say that about most other indices. Quite frankly, the risk appetite around the world continues to look anemic, and Germany is going to be no different, especially as energy becomes a concern.

The financial markets are a bit of a mess these days, and gold will reflect that right along with everything else.

Gold markets initially tried to rally on Monday but gave back gains to show signs of weakness yet again. Ultimately, the market is likely to continue to see a lot of volatility and negativity. The gold markets giving up gains near the $1840 level suggests that we could go to the bottom of the overall consolidation area, which is at the $1800 level.

The 200-day EMA is sitting just above the $1850 level and going sideways. That suggests that the market is currently looking for some type of bottom, and the $1800 level could be a huge area. The $1800 level is not only a large, round, psychologically important number, but it is also an area that has seen action in the past, so I do think that it is crucial. If we were to break down below the $1800 level, it’s likely that we go down to the $1750 level rather quickly.

If we were to break above the $1850 level, it’s likely that we could go to the $1880 level. The $1880 level is an area that has been resistant more than once, so I do think that it is probably going to be crucial if we do break above there and will more likely than not send the market much higher. At that point, the market is likely to see an attempt to get back to the $2000 level, which obviously would attract a lot of attention, which could bring in more money.

The interest rates in the United States will continue to have a major influence on where the gold market will go next. Ultimately, I think the only thing you can count on here is a lot of volatility, and that being said, the market is going to see swings in both directions, so you need to be very cautious with your position size, and perhaps focus on short-term charts more than anything else. After all, the financial markets are a bit of a mess these days, and gold will reflect that right along with everything else. The US dollar has a negative influence on the gold markets as well, so pay attention to the US Dollar Index. The candlestick for the day suggests more weakness than strength, so you should probably keep that in mind.

It will be a case-by-case basis, but overall it should bring down the index if we do in fact see growth get hit.

The French markets rallied initially on Tuesday to reach the €6000 level, but the CAC could not hold on to the gain. This was seen across the board, as initially risk appetite returned on Tuesday, but was given back rather quickly. It’s interesting that this happened, as we have just formed a “double bottom” just below. If that bottom gets broken, that could open up massive selling in the CAC, as well as be a sign that even more trouble is on its way for stock markets in general. The European Union of course will be very sensitive to the CAC as it is the second-largest market.

On the upside, the €6100 level did offer a bit of resistance, but if we were to break above the top of the candle from Tuesday, that would extensively turn it into an inverted hammer, which can be a bullish sign. At that point, I would anticipate that the CAC would try to get to the €6200 level, perhaps even as high as the 50-day EMA. That being said, it is difficult to imagine a scenario in which European stocks suddenly take off, because there have been comments here and there from the ECB about possibly tightening, and even if that weren’t the case, there are a lot of concerns when it comes to growth and energy.

On a break down below the double bottom, I think we have a real shot at going down to the €5500 level over the longer term. The stock markets in general around the world look very miserable at the moment, so I just don’t see how this will change. Given enough time, three likely that we see them all move in the same direction, and that is going to be lower. There are concerns about recession around the world, and France is no different.

Keep in mind that the French index has a lot of exposure to luxury goods, so it needs people out there willing to spend on luxury goods. In a recessionary environment, those are normally the first things to get thrown out, although it should be noted that the ultra-wealthy do tend to survive quite well. It will be a case-by-case basis, but overall it should bring down the index if we do in fact see growth get hit.

There’s no scenario in which I’m willing to buy this market, due to the fact that there is so much negativity out there, and risk appetite is through the floor.

Ethereum markets initially tried to rally on Tuesday but gave back gains near the $1200 level as we continue to see a lot of negativity in the crypto market. Ultimately, this is a situation that you need to pay close attention to, as the crypto markets in general are on the precipice of a significant selloff. Ultimately, the $1000 level is going to be crucial for Ethereum, so pay close attention to whether or not we can stay above there. If we can, that would be the first positive sign that we have seen in crypto in a while.

On a breakout to the upside, we could see an attempt to get to the 50-day EMA, which currently sits at roughly $1800. $1800 level is an area that has been important previously, as it had been supported. Now it should end up being resistance, but at this point, I think it’s a little ambitious to think that the market is going to make that move, but if we did, it should end up in a nice shorting opportunity. Quite frankly, the Ethereum market has been so noisy as of late and negative that I just don’t see how this thing changes.

If we break down below the lows of the last couple of days, then it’s possible that we could go down to the $800 level, perhaps even the $600 level. Fading rallies continue to be the best way forward, but if we do just simply roll over and fall apart, you cannot argue that as well. That being said, there’s no scenario in which I’m willing to buy this market, due to the fact that there is so much negativity out there, and risk appetite is through the floor. The market will continue to be difficult for buyers, and I think that we have a lot of concerns out there. When it comes to anything remotely close to being far out on the risk spectrum, crypto is way out there and you need to keep all of that in mind. The market has been in a downtrend for quite some time and should continue to be until the Federal Reserve changes its monetary policy, perhaps sometime late this summer, but the next two meetings are already promised to be rate hikes.

Any rally at this point in time will have to be looked at with suspicion, so you most certainly need to be cautious about buying gold at the moment.

Gold markets initially rallied on Tuesday as we gapped higher. However, we turned around to show signs of life and then fell again. Ultimately, the market is one that is testing a major support level underneath, so the fact that we have bounced from there does suggest that we are going to eventually have to make a decision for the longer term. At this point, a lot of what people are paying attention to is the Federal Reserve and its hawkish behavior, something that continues.

The Chairman of the Federal Reserve Jerome Powell spoke during the trading session where he suggested that the Federal Reserve would be more than willing to “go well above the neutral” in order to combat inflation. This could lead to an even stronger US dollar, and it is likely that we would see this market fail at that point. We need to break down below the hammer from the previous session in order to completely flush lower, but one thing is for sure, the price action during the trading session on Tuesday was less than impressive.

Even if we do rally from here, breaking above the top of the candlestick could open up the possibility of a return to the 200-day EMA, which is currently sitting at the $1857 level and drooping. Any rally at this point in time will have to be looked at with suspicion, so you most certainly need to be cautious about buying gold at the moment. That being said, it is worth noting that the $1800 level is a large, round, psychologically significant figure and an area where we have seen support previously. If we were to break down below there, it could get very ugly.

If we do break above the 200-day EMA, then the market has a chance of going to the $1900 level, but it would obviously need some type of momentum to make that happen. Ultimately, I think this is a situation in which we will continue to see a lot of choppy behavior, so at best we are probably looking at a sideways market and a bit of range-bound trading setup. Pay attention to the US dollar, 10-year yields, and all of the usual suspects when it comes to this market and the correlations.

Gold has started to kick off a big move lower, and therefore I have no interest in buying.

Gold markets shot higher during the trading session on Thursday as we gapped higher to kick off the day, to continue what had started late on Wednesday. The market reached as high as the 50 Day EMA but has since pulled back quite drastically. The ugly candlestick that we have formed for the day suggests to me that we are going to continue to struggle, as the 50 Day EMA is above the candlestick, and then the 200 Day EMA underneath offers support. Quite frankly, the market typically builds up a lot of inertia between these two moving averages, before making a bigger move.

If we were to break down below the 200 Day EMA, then it is likely that we will continue to see a massive selloff, perhaps sending gold down to the $1800 level. The $1800 level is an area where we had seen a move to the upside, so it could possibly be a target. Furthermore, it could also be a major support level, as it is historically so. If we were to break down below the $1800 level, then it is likely that we could go much lower.

On the other hand, if we were to turn around a break above the 50 Day EMA, then we could go looking to reach the $1970 level which has been resistant previously. Pay close attention to the US dollar, because the US dollar is king at the moment, and it is obvious that the gold market is being smacked around as a result. The shape of the candlestick does suggest that rallies will continue to be sold, but we have not completely broken through all of that support yet. The candlestick suggests that there are a lot of concerns out there and as a result, the US dollar continues to be the only thing that is working from a longer-term standpoint.

I do think that gold has started to kick off a big move lower, and therefore I have no interest in buying, at least not until we get a daily close above the 50 Day EMA. If we do get that, it would be a Herculean effort and therefore you would have to pay close attention to the market and what it was trying to tell you. The only thing you can count on is volatility at this point.

Ultimately, I do favor the upside but I also recognize that we are just not quite ready to go higher.

Gold markets initially rallied on Tuesday but gave back gains rather rapidly in the middle of the session as yields in America continue to climb rapidly. Because of this, the gold markets continue to be very difficult to trade from anything more than a short-term perspective, as we have been in a range for a while. The gold markets are volatile most of the time, but recently we have settled into a relatively well-defined range between $1910 and $1950.

There is a mix of factors out there that are pushing the market around, not the least of which would be the interest rates on the 10-year note. They continue to spike higher, and that is negative for gold. At the same time though, we have the inflationary concerns around the world that are driving those higher, and that gives a little bit of support for gold where it would normally not find it.

Looking at the technical analysis, the range has been reliable over the last couple of weeks, but sooner or later we will make a bigger move. A long daily candlestick is probably needed to add enough confidence to make traders get involved, and it should be noted that we are seeing support from the 50-day EMA as well, which is something that will attract a lot of attention. The $1900 level sits underneath there, so I think we will see a huge barrier of support in that general vicinity.

That being said, you could make an argument for a bit of a descending triangle right now, but until we break down below that $1900 level on a daily close, I am not completely convinced. The market breaking down below there would open up the possibility of a move down to the 200-day EMA, which sits just below the $1850 level, but I do not think that is the most likely of moves, at least not without some type of massive strengthening of the US dollar.

On the upside, if we were to take out the $1950 level, then it is likely that we will go looking towards the $1970 level, and then even the $2000 level, an area that has a lot of psychology attached to it to say the least. Ultimately, I do favor the upside but I also recognize that we are just not quite ready to go higher.