Gold Price Analysis – Gold Bounces as Rates Drop Early on Thursday

Gold Technical Analysis

The gold market has rallied nicely in the beginning of the Thursday session as interest rates in the United States have pulled back a bit. This is the correlation that we’ve seen for some time: rates drop in America and gold, of course, rallies as a result.

With that being the case, I think you have to look at this as a market that is desperately wanting to see the 10-year yield drop back to the 4.30 level. If we get anywhere near that, I think you’ve got a real shot at this market doing anything and everything it can to get involved to the upside. The recent sell-off, of course, has been fairly brutal, but the $4,600 level continues to be an area of interest. With this, I look at gold as being a market that will probably just continue to see a lot of volatility.

Market Volatility and Geopolitical Factors

I don’t really see a scenario in which things calm down quickly. After all, we have a lot of questions to ask about the Middle East and how the latest headlines are going to influence everything. Ultimately, I believe this is a market that you are looking for reasons to buy and that reason is more likely than not going to be dropping rates.

Keep an eye on the 4.30 level in the 10-year yield. I don’t think we will get below there today, but if we do get below there, that should send this market looking for the 50-day EMA fairly quickly. If we break above the 50-day EMA, now you’re talking about $4,900. Selling at this point in time is still possible, but I think rates are starting to get a little exhausted, and with that being the case, we probably see a little bit of a relief rally here.

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