Gold Price Analysis – Gold Rises Toward a Major Level on Tuesday

Gold Technical Analysis

The gold market has rallied a bit during the trading session here on Tuesday in the early hours as we are reaching towards the $4,600 level. That being said, I’m watching the 10-year yield pretty close, and it is worth noting that the 10-year yield is stalling slightly, but it is still at an extraordinarily high level.

So, with that being the case, I trade this against each other. What I mean by that is the 10-year yield falling in America has me buying gold, 10-year yield rising in America has me shorting gold. In fact, this has been the bulk of my trading as of late, and this is a correlation that still remains pretty strong.

Interest Rates and Inflation Concerns

The US 10-year yield is still at an extraordinarily high level as you can see on the chart. Going back multiple times we’ve gotten here, and every time we get there, it seems like gold struggles a bit. Not always, but often. As things stand right now, a lot of what you’re seeing in the bond market comes down to worries about inflation.

Inflation means that the Federal Reserve will have to stay tighter for longer, which, of course, continues to make the US dollar a little stronger than it should be in normal circumstances. So, with that, it will cause some issues for gold, which, of course, is a non-yielding instrument.

I’m looking to fade the move to the upside if the rates start to pick up again. If they don’t, then we could go all the way to the 50-day EMA. This would obviously be a massively bullish act, and would catch a lot of interest.

If you’d like to know more about how to trade gold and silver, please visit our educational area.