Gold Price Hits 10-Day Low as Rising Yields Test Support

Gold Technical Analysis

The gold market has fallen pretty significantly during the early part of the Tuesday session, reaching a fresh 10-day low, but really at this point, I think a lot of this comes down to the idea of rate repricing in America. Interest rates continue to climb as the Federal Reserve Chairman Kevin Warsh last Friday had suggested that rates could go higher while everybody seemed to be looking for lower rates, and in this environment, that causes quite a bit of chaos. Higher rates mean that the non-yielding assets, such as gold and silver, really take it on the chin at times.

Technical Support and Central Bank Demand

The 50-day EMA sits just below there, and then just under there we have the 200-day EMA. That’s my alternate scenario. Does that hold as support? If it gets broken through, that could be somewhat ugly.

The market is also reacting to the way oil is behaving because oil ramping back up drives up the idea of inflation, which reinforces the idea that the Federal Reserve may have to stay tight. That is not good for gold, but longer-term, I do like this asset. Sooner or later, the central banks will do what they’ve always done, but right now, there are central bank purchases out there. And in fact, they bought 244 tons in the first quarter, the highest quarterly figure since late 2024, with China since then adding at least 8 tons in April, its biggest move in quite some time.

So, there is still a longer-term structural support to this market, but in the short term, a lot of this is going to come down to interest rates and what they’re doing. The 10-year yield is now at 4.78% and is really starting to show some signs of stress.

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