Gold Technical Analysis
The gold market finds itself struggling a bit in the early part of the trading session here on Thursday. With the $4,300 level being targeted, it suggests that perhaps we are going to continue to see a lot of questions asked about whether interest rates continue to climb or if we see some type of relief. That will have a major influence on what happens.
With interest rates being so high in America, that really has put a lot of trouble into the gold market, as the paper markets are much cheaper to hold. Storage becomes an issue, etc. Gold does not like these higher interest rates.
Breakdown? Maybe
As things stand right now, it certainly looks like we could see a breakdown based on interest rates screaming higher. If they roll over, generally speaking—and this has been the way forward for a while—gold does get a little bit of relief.
We’re right at that area where we expect to see support come into the picture. If we do get a bit of a bounce here, then it’s just more of the same. Unfortunately, for those who like gold, I think they’re stuck in a situation where they have to watch what the bond market’s doing and how crazy it’s behaving.
The bond markets, of course, are reacting to energy inflation potential, and that is something that is literally out of the market’s control. We have been bouncing around between $4,300 and $4,500. We’ll see if that sticks, but it is worth noting that the most recent surge higher rolled right over and showed weakness right away.
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