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MENAFN- Daily Forex)
The gold market has dropped a little bit during the trading session on Tuesday, as we continue to see a lot of choppy behavior overall. That being said, gold is still a market that I pay attention to every day, because I do think that we are trying to determine where we go for the rest of the year.
Gold has been very bullish until recently, although to say that we are no longer bullish is probably jumping the gun. After all, markets cannot go in one direction forever, and we have recently seen a lot of market calming effects influence what's going on externally. We have seen the tensions in the Middle East ratchet down a bit, and although the war in Ukraine is still going on, it seems as if the world is willing to look beyond that. It is no longer thought of as the beginning of World War III. That being said, it is something that could always jump to the forefront, so keep that in mind.
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The technical analysis for the gold market is somewhat sideways over the last couple of months, but when you look at the last couple of years, we have been very strong. I think that probably continues to be the case, although a lot of the main factors for gold going higher have started to abate. What I mean by this is that the United States dollar is at least putting up a fight at this point, and of course, the situation in the Middle East, as mentioned previously, has calmed down a bit.
Central banks do continue to be major buyers of gold, so that is a tailwind for the market, and traders are now starting to pay close attention to the Federal Reserve, because even though they are expected to cut rates later this year, that is still an open question and that could cause problems for gold as well. If interest rates in America continue to climb, that makes US treasuries much more attractive than gold, because you do not have to pay for the storage cost. Furthermore, you get paid to simply sit there, something money managers love. I am a buyer of dips, as long as we can stay above the $3200 level.
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