Gold Price Analysis – Gold Continues to Move to Rates

Gold Technical Analysis

Gold markets have fallen a bit during the trading session on Thursday in the early hours as interest rates in America continue to climb. As long as those rates climb, then we have a situation where gold, I think, struggles to find any real traction.

Yes, I understand there’s the safety aspect of gold, but when you have non-yielding assets fighting yielding assets in the form of bonds that continue to yield more, this is what happens. As long as the war goes on there will be people out there pricing in the idea of higher rates for longer and I think it weighs upon gold.

The Influence of the Bond Market

I know it’s counterintuitive to what you’ve always been told, but the bond markets run everything before it’s all said and done, so that’s why you should be watching the 10-year yield. The 10-year yield approaching 4.4% is a major problem for gold, and therefore, I think gold at best consolidates in this area.

It is interesting that it could not break above the 4600 level, an area that has been such a brick wall. If we were to take that level out and continue to go higher, I could see this market heading towards the 50-day EMA, but quite frankly, I think we need to see yields in the United States drop pretty significantly. There are no signs of this happening at the moment.

I’d say you’re probably looking at a lot of back-and-forth sideways action with a bit of an overhang sitting on top of it here. This is a market that will remain tough in this environment.

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