Gold Price Analysis – Gold Continues to React to Rates

Gold Technical Analysis

Gold rallies early on Tuesday as interest rates in America are starting to slip a bit, providing a little bit of comfort for gold traders. We currently find ourselves hanging around the 50-day EMA, which, of course, is an important technical indicator, but I think at the end of the day, what’s even more important is the fact that we’re at the $4,800 level. This is an area that has been important more than once in the past.

If we can continue to see rates in America slip, we could see this market going looking to the $5,000 level. Good news will continue to drive rates lower, and it does look like we are starting to at least see the idea of good news coming out of the Middle East for once. That, of course, releases some tension in the market. This is a market that is simply moving to the latest moves in risk appetite, but also reacting to the bond market moves as well. (One in the same.)

Technical Indicators and Market Outlook

Ultimately, I think this is a market that is still bullish and has a floor in it somewhere near the $4,600 level. I am optimistic, but I’m also cautious with my position size because, quite frankly, it would only take a comment or some type of random action in the Middle East to send everything back up ablaze.

So be cautious, but I remain optimistic, and I do think that in the longer term, gold is still a bullish instrument to trade. I have no interest in shorting this market and believe that once the geopolitical situation calms down a bit, gold should do quite well.

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