Gold Price Analysis – Gold Continues to Move with Rates in the US

Gold Technical Analysis

The gold market initially plunged during the trading session on Monday, but as you can see has turned around quite nicely to show signs of life again. With that being said, I think you have a scenario where traders are going to be looking at the interest rate situation in the United States to determine what to do next. This has been the correlation since the war kicked off in the Middle East.

As interest rates rise in America, that puts pressure on gold in general as it is a non-yielding asset. However, it is worth noting that we have held firm at the 4600 level and this looks a lot like a market that is ready to turn things around for perhaps an even bigger move. This is a market that I will be interested in owning down the line, but at the moment, it is short-term trading at best.

Technical Support and Geopolitical Drivers

If we get signs that the war in the Middle East ends anytime soon, that is probably exactly what will make gold just take off. All things being equal, I am a buyer of dips, and I do like gold longer term. I do not have any interest in shorting it, but I also recognize that you do not want to pile into it with a huge position in this environment. One headline could cause chaos and change everything, and therefore you must be careful in general. I favor the upside, but recognize that things could change quickly, and therefore will remain cautious.

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