The gold market fell on Friday, as we continue to see a lot of inflation destruction in the United States, with the interest rates falling in conjunction with gold prices falling. Are we seeing a regime change?
Gold
The gold market fell pretty significantly during the course of the trading session on Friday, as the market also had a very severe lack of liquidity and trading hours. After all, the Americans were away celebrating Juneteenth, and this, of course, closed the markets a little early.
Volume would have been anemic to say the least, as the majority of massive futures firms tend to focus on the American session. That being said, when I look at this chart, I do recognize that there is a significant amount of support just below, and I do think that the $4,000 level is an area that you will have to look at very closely.
The $4,000 level is an area that's been important for quite some time, and of course, there's a lot of psychology attached to it.
Key Support Levels and Inflation Outlook
If we drop and then bounce from here, forming a V pattern, then it's possible that we could bounce all the way back to the $4,370 level where the 200-day EMA sits.
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Interest rates in the United States are a bit lower than they were just a few days ago, but at the same time, gold continues to fall. I think maybe what we have is a potential look at a lowering of inflation expectations, and that could be part of what's going on here as well.
Pay attention to the US dollar in general, as if it starts to fall, that could help gold, but right now, I think we're in the midst of trying to find some type of range to trade back and forth in.
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