Gold Price Analysis – Gold Moves on Rate Again

Gold Technical Analysis

The gold market initially fell during the trading session on Wednesday, but it looks like the buyers are coming back to try to pick it up. Ultimately, this is a market that is paying close attention to the interest rate situation, which of course has been explosive, and with that being the case, I believe that the $4600 level above will be a potential target. If we can break above there, then the 50-day EMA could be targeted next.

Pulling back from here opens up the possibility of a drop down to the 200-day EMA, where I would expect to see a lot of technical support.

The 10-Year Yield

But quite frankly, I think without a doubt the biggest factor here is going to be the 10-year yield. If it starts to drop, that helps. If it starts to rise yet again, that hurts gold. And that’s going to be true with all non-yielding assets in general: gold, silver, etc.

So right now, I think it’s probably got more downward pressure than up, but I also recognize that a short-term bounce does make a certain amount of sense. I’d be watching the $4600 level for signs of exhaustion, and I would be watching the 10-year yield to see if it starts to drop to help us, or if it starts to rise to hurt us.

Gold is not a safety asset, at least not in this particular situation. So therefore, keep in mind that non-yielding part of the market has to be respected. This will continue to be the situation that we find ourselves in when it comes to trading gold.

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