Gold Weekly Price Analysis – Gold Continues to Fight Back

Gold Markets Weekly Technical Analysis

The gold market has been positive this week, but it’s also worth noting that it’s also been very noisy. The interest rate situation in America continues to be a major driver, and as rates go higher, it does tend to work against gold, so keep that in mind.

I’ve been watching the 4.30% level in the 10-year yield in the United States to give me a little bit of a read as to whether or not gold should be performing well or not. As a general rule, this past week, as rates dropped below 4.30%, gold did well; conversely, when rates jumped above that, gold did poorly.

Interest Rates as the Primary Driver

The main reason gold is struggling is interest rates. After all, most people would expect gold to do fairly well in the geopolitical environment that we find ourselves in, but the reality is that it’s all about interest rates. Gold is a non-yielding asset, and that causes some issues, and that, of course, is unfortunately causing a lot of problems for retail traders.

With that being said, I think you have to look at this as a market that you have to keep 1 eye on the 10-year yield, the other on the charts, and as yields drop and gold starts to rise it becomes a fairly significant buy signal. I do think eventually this is a market that will find its way higher, but I also recognize that this is a market that will continue to be very noisy and, unfortunately, I think probably very difficult to hang onto.

Smaller positions would be the way to go forward because, quite frankly, a random tweet or sudden statement coming out of the Middle East or Washington could change your position immediately. I do favor the upside. I don’t really like shorting.

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