Gold Technical Analysis
The gold market has rallied just a touch during the trading session here on Tuesday, but really, at this point in time, we have a market that is stuck between the 50-day EMA and the $3,900 level. This $300 range roughly has contained the market for well over a month and we are in a situation where traders continue to look at this as a market that is trying to figure out where to go next. This remains a serious problem from what I see.
Middle East Uncertainty and Bond Yields Keep Gold Range-Bound
The interest rate markets have drifted a little bit lower in yield during the session, but we’ve seen this play out multiple times. The overall attitude of market participants will continue to see a lot of questions asked about the Middle East and what the overall energy situation will be and by extension inflation. This is a correlation that will continue to be on the minds of many traders out there, with the Strait of Hormuz a major factor.
So, while bond traders believe there is more inflation coming, the wider market seems to be arguing with them. The bond market and the interest rates have a major influence on what happens with gold. Right now, we’re just simply stuck waiting for some type of resolution or, unfortunately, flare-up coming out of the Middle East to determine what to do next. As things stand right now short-term traders seem to be very happy in this range and that’s pretty much how I look at it as well.
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