Gold Price Analysis – Gold Continues to Move on Rates

Gold Technical Analysis

The 200-day EMA is offering a little bit of resistance above, but I think if we can break above it opens up the possibility of a move to the 50-day EMA at the crucial $4600 region. That’s an area that’s been both support and resistance multiple times, so it does make sense that it remains important to traders.

The Impact of US Interest Rates

However, the biggest thing you need to watch at this point in time is the interest rate markets in the United States. So, with that being said, I keep an eye on the 10-year yield to get an idea as to where things are going. If the 10-year yield starts to rise again, that will put pressure on gold, but it did roll over a little bit early after initially causing some headaches. After all, the Israelis and the Iranians are throwing missiles at each other, but most importantly, the Americans look like they don’t want to be involved. And if that’s the case, we may be closer to peace, or at least non-escalation than people think, and that could help with interest rates.

We’ll have to wait and see, but you cannot trade gold at the moment, or many other commodities for that matter, without looking at the interest rate markets. If those rates rise, that will drive the gold market down to the $4200 level. If we break to the upside, then I think given enough chance, then we could look at this in the prism of falling rates makes a non-yielding asset much like gold a little bit more appealing.

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