Is Gold Ready for a Swing Up?

This is an interesting looking gap up in price for gold futures over the weekend. The gap up occurred after a multi-week selloff, so this could be just a technical bounce. But a weekend of further escalating tensions in the Middle East is adding to the upward pressure in the precious metal.

It appears as if investors are feeling the safe haven appeal of the precious metal after the Middle Eastern conflict worsened over the weekend. President Biden himself is talking about retaliating against the Huthi militants for killing American troops.

This news seemingly brought up oil prices over the weekend as well. I did hint towards a little upside for oil in some of my previous comments about the black gold. Check out my previous comments in the link directly below.

It is still too early to call it, but when there is a gap up near a strong support zone like you see in the chart below, then I think there is more legitimacy to the bullishness. Traders are usually more inclined to buy at support, which could warrant a technical bounce at this technical level.

The bearish divergence on the weekly candles has me a bit worried. But RSI and MACD are still in bullish territory on the daily candles, so things are still technically bullish. And the gap up over the weekend is only adding to the bullish outlook.

I should mention that if gold starts to sell off and dips below 2000 very soon, then that would lead to a death cross and bearish cross on the weekly and daily candles, respectively. This would be a VERY BEARISH technical development if it occurs.

When Jerome Powell talks about interest rates later this week, it could lead to some gold volatility. His comments will affect the dollar, which in turn will cause gold's price to move accordingly. Gold traders will definitely be watching the Fed this week.

As always, I am not a financial professional, and this is not investment advice. Be careful and be patient. Dont anticipate the market. Rather, participate in the market. Don't invest money that you can't afford to lose. Give some of your investments time and know when to cut your losses.

Don't be greedy. Don't invest in anything you don't understand. Don't put all of your eggs in one basket. Don't listen to the hype. Don't fomo or panic into or out of trades. Do your own due diligence. And just follow the trends. A trend is your friend. Good luck trading.