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Last week, gold prices broke through the resistance line, indicating a reversal of trend to the upside as they climbed toward their 50-day moving average. The metal then closed the week at $1,709.30 per ounce.
This turn to the upside was not confirmed by a corresponding breakdown to the downside on the U.S. dollar chart.
While some may consider this a buying opportunity for gold, the current market environment remains unfriendly to the metal.
Gold is likely to have a friendlier market environment in the future once we see inflation rates lowering, allowing the Federal Reserve to be less aggressive with interest-rate hikes. Once that happens, the dollar may become less attractive to investors and reduce the headwind that gold is currently experiencing.