Gold Price Forecast – Gold Markets Give up Early Gains

Gold markets have initially tried to rally during the trading session on Thursday but have given back the gains as the 10 year note crossed the 1.30% level again in the United States, making gold less attractive as real interest rates were rising. With that in mind, it is toxic for gold as gold actually cost money to own, so it looks as if the market is ready to test the $1750 level below, which I have touted for a while as a potential “floor the market.”

If we were to break down below the $1750 level, I think that at that point we could probably see a rather significant selloff in this market. At that point, I would not be surprised at all to see the market drop $200. Nonetheless, I would also point out that if we were to turn around a break above the highs of the trading session on Thursday, it is technically an “inverted hammer”, which could be a bullish sign, but I do see quite a bit of resistance above that could come into play.

The first place of course would be the $1800 level, and then the 200 day EMA at the $1822 level, folly followed by the $1850 level. In other words, gold looks very soft at this point in although I do like gold from the longer-term standpoint, I am not going to rush into this market because quite frankly I feel and believe that as long as there are yields rising in America, people will shun gold, perhaps offering a great longer-term “buy-and-hold” type of position underneath. It typically will not sell gold but as money flows into the bond market, it makes quite a bit of sense that we will continue to see negativity.