Gold Price Analysis – Gold Gains Capped by Persistent High Interest Rates

Gold Technical Analysis

The gold market has rallied a bit during the trading session on Thursday as we are reacting to the jobs number in the United States on Thursday, because Friday of course is a holiday in America, which will greatly influence liquidity and the trading times of the gold futures market, so keep that in mind.

That being said, this is a market that looks like it is going to try to test the $4,200 level, which is a large round psychologically significant figure that traders will be interested in, and I personally am watching this to see if there is any follow through because despite the fact that the non-farm payroll announcement disappointed with an addition of only 54,000 jobs last month, the reality is that we still have a long way to go before anything changes.

Navigating Structural Moving Averages and Yield Pressures

Breaking above the $4,200 level opens up the possibility of a move to the 200-day EMA, but if we show signs of exhaustion, I think the $4,000 level ends up being a bit of a floor. Breaking below $3,900 to me at least opens up the possibility of gold dropping down to the $3,500 level.

Rates remain elevated, which is a drag on gold as it is a non-yielding asset, and as long as that is the case, the upside in the gold market is probably somewhat limited in this environment. With this, signs of exhaustion might be what I am looking for, as I am still not convinced that this is anything more than a technical bounce.

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