Gold Price Analysis – Gold Drops Hard with Rates Jumping

Gold Technical Analysis

The gold market has absolutely cratered during trading on Friday as the jobs number in the United States has come out much hotter than anticipated. That being said, we also find ourselves in an area that I think could be interesting for support. So, we’ll have to watch that 10-year yield in America and how markets move based on the idea of jobs coming out twice as strong as anticipated.

Longer term, we’ll see if this matters. This is a Friday reaction, it’s going into the weekend, there’s probably a bit of liquidity issues as well. But it is worth noting that traders, at least in the bond market, think that the Fed will stay tighter for longer as the 10-year yield has broken towards the 4.54% level again.

The 200-Day EMA and Downside Targets

The 200-day EMA, at least in theory, should be interesting for buyers, but we’ll have to see. I don’t want to be the first person to jump in. If we bounce from here, then maybe a short-term buying opportunity presents itself. In that environment, I anticipate that gold could have a nice little move coming.

If we break down below the 200-day EMA, and quite frankly we’re already down 2.5%, so this might slow things down, but if we did, that could send this market down to the $4,100 level before it’s all said and done. That more likely than not would be accompanied by really high interest rates, and that is something that we will have to look at very closely, as it is a correlation between these two markets.

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