Gold Price Analysis – Gold Plunges on Higher Yields

Gold Technical Analysis

The gold market gapped lower to kick off the session on Thursday and at this point in time it just looks like it’s going to fall apart. The price action has to be something that traders are concerned about at the moment.

That being said, we do have a scenario where there is a lot of support at the $4600 level, and I would be watching that very closely. I’d also watch the US 10-year yield as it approaches 4.3% because if it breaks above there, it’s probably going to really bash gold.

Giving up $4600 for me would be a horrific sign and ultimately, I think you need to watch whether or not that happens. If we bounce from here and the yield in the 10-year drops away from the 4.3% level, that could be good for gold.

Fed Reaction and Rising Rates

This is mainly in reaction to the Federal Reserve press conference yesterday, which, as per usual, Jerome Powell made a mess of it and certainly did not bring confidence to the market.

So, you have to believe at this point in time market participants are starting to worry about those rates rising, which typically works against gold, as it is cheaper to hold paper (or electronic notes) than it is to store metal in a warehouse somewhere.

But we also have geopolitics working for it, so we’ll just have to see how that plays out. Over the next couple of days, we should find out whether or not this trend can hold or did we just make a massive double top and start spinning out of control to the downside, at least for the time being.

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