Gold prices are holding steady on Friday to finish out the holiday shortened trading week. All in all, it was a relatively quiet week for trading in the yellow metal. The market has held its bullish posture, however, and seems poised for more gains in the near future.
Investors are paying close attention to any developments coming out of Ukraine. Another truce was supposedly reached last night, but the notion of a truce does not seem to carry a lot of weight as this is not the first truce agreement that has been reached. Although the gold market does not seem terribly fazed by this yet, it would not be surprising to see some safe haven buying come into the gold market as Friday drags on before the weekend.
Stocks continue to march higher once again, and the fact that gold is holding its own in light of these gains is encouraging for the gold bulls. Equities are fast approaching the previous highs, and it is anyone’s guess as to whether or not stocks are able to breach those highs on the upside and start another leg even higher. Should this prove to be the case, it could begin to weigh on precious metals prices. If stocks roll over here at the highs, however, it could be potentially very bullish for gold as investors continue to reallocate assets. Higher crude oil prices which are maintaining trade over $100 per barrel are also bullish for gold and precious metals.
Gold investors will continue to pay close attention to any commentary by the Fed with regards to its tapering plans. Thus far, Janet Yellen has not rocked the boat at all and seems to plan on continuing in the steps of her predecessor. Tapering appears to have been discounted by the gold market at this point, however, should the Fed indicate that it may need to slow its tapering it could potentially be bullish for gold and precious metals.
Gold looks technically poised for more upside. While things can change rapidly, the daily chart is looking very constructive at this point and the market appears to be consolidating recent gains this week. Tuesday’s highs around $1332 are the next area of resistance while up above, the $1360 area seems to be a possible target in the near-term. $1280 appears to be the line in the sand for the bulls at this point, although it is likely that many would like to see the gold market stay above the psychologically important $1300 level at this point.
