(MENAFN- Daily Forex)

• The gold market was very noisy during the trading session on Wednesday, dipping initially only to turn around and show signs of life.
• From a technical analysis perspective, it's easy to see that the 50 day EMA is offering a little bit of support.
• In fact, we have seen that be the case a couple of days in a row now.

And now it looks like we are trying to turn things around and perhaps rally back towards the $3,385 level. This is a market that has been consolidating for a while as we had shot straight up in the air. And now we have to work to burn off some of this excess in the market. Sometimes you get a significant pullback. Other times you see the market go sideways for a while and just work off that fraud via time.

As things stand right now, it looks like the gold market is trying to get people used to the idea of trading between $3,200 at the bottom and $3,500 at the top. A $300 range, is something that makes a lot of sense because there are a lot of moving pieces around the world right now that people have to pay attention to. For example, we have a lot of geopolitical concerns, obviously, but they have calmed down a bit.

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We also have to worry about things like what is the Federal Reserve going to do as far as interest rates are concerned? While the markets believe that the Federal Reserve is going to interest rates by the end of the year, the reality is the interest rates probably don't get crushed, at least not in the short term. Jobs still remain stubbornly abundant in the United States.

EURUSD Chart by TradingView

As long as that's the case, the Federal Reserve is going to be at least a little cautious about tinkering with monetary policy. We do have central banks around the world jumping into the market and buying gold. So that provides a little bit of a natural bid anyway. And with that, we just get a lot of this choppy back and forth behavior that quite frankly, we entered in the middle of April and just haven't been able to escape. If and when we do, that should lead to at least a $200 move, if not a $300 move. On a breakdown, I would be watching the $3,000 level very closely because if we give that up to the downside, that would be extraordinarily negative. On a break to the upside, I'm looking at $3,800 based on the measured $300 consolidation.

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