Gold Price Analysis – Gold Continues to See Rates Move It

Gold Technical Analysis

The gold market initially tried to rally on Thursday but has rolled over as interest rates in the United States have risen. Ultimately, this is a market that I think, given enough time, will have to make a bigger move, but as things stand right now, it’s all about the interest rate markets. It’s not about a fear or safety trade or anything like that. Gold does not provide any type of yield, and larger money managers prefer a guaranteed yield over a market that’s flying around in circles.

With the situation in the Middle East, we still have a lot of questions out there about risk appetite, and as long as that’s the case, we will continue to see this market be a bit of a chop fest, if you will.

Market Catalysts and Key Technical Levels

If we can break above the $4,600 level, then it opens up the possibility of a move to the 50-day EMA, which is just under the $4,700 level. I think at this point in time though, we would have to see the US yield start to drop.

They have been extraordinarily strong as traders are pricing in the idea that the Federal Reserve will have to stay tighter for longer due to inflation coming from supply chain stocks and energy inflation. With that being the case, I think we have to look at this through the prism of a market that is waiting for some type of certainty to come out of the Middle East, and then if you start to see interest rates drop, gold will be the place to be. If this keeps up, you’ll probably continue to see the US dollar strengthen because of these rates, which, of course, naturally does tend, not always, but generally does tend to put some pressure on the gold market.

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