Gold Price Analysis – Gold Drifts Lower on Wednesday

Gold Technical Analysis

The gold market has been somewhat negative during the early hours on Wednesday as we continue to see a lot of noisy behavior. That being said, we are between the 50-day EMA and 200-day EMA indicators. Ultimately, I think this is a market that will continue to see a lot of choppiness and a lot of questions asked about it. The market continues to be focused on short-term moves more than anything else.

But if we can break above the $4,600 level, I think that gives gold the opportunity to continue to rally, especially if we also clear the 50-day EMA, which is just above there. Interest rates continue to cause a lot of havoc here, so you do have to pay attention.

Interest Rate Pressures and Monetary Policy Outlook

But ultimately, I do think you have a scenario where traders will eventually try to push gold higher. One thing that would help in a huge way would be whether or not we can drive rates lower. After all, higher interest rates are absolutely toxic for non-yielding assets like gold. This will continue to be the case going forward from what I can see, as it has been the case for some time now.

But longer term, I think central banks are more likely than not going to have to loosen monetary policy once the inflation concerns get cleared up. All things being equal, the markets are basically grinding sideways, trying to form some type of accumulation phase. The markets are looking to see a lot of external pressures. That being said, I am not interested in shorting.

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