The gold market has been sideways all day, matching the price action we have seen for a few days now.
Decreasing interest rates could be helpful as well.
The gold market continues to see a lot of noisy trading as the interest rate market of course is driving everything. At this point in time, it looks to me like the interest rates in America are starting to roll over just a touch and that will have its own influence on everything that is going on.
I recognize also that this is a market that will probably have to deal with a lot of random headlines giving traders headaches as the attitude of the market is being dictated by the occasional tweet or occasional headline coming out of the Middle East which just causes chaos. With rates dropping, one would expect market participants to be a little bit more interested in owning gold, so we will just have to see how that plays out.
Market accumulation and interest rates
As things stand right now, I think you have a situation where you probably go more sideways than anything else given enough time. I do believe that you will probably see gold truly just launch later this year, perhaps going to the $5,000 level.
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The 50-day EMA sits just above the area that we have been trading in for 6 days now, so I do anticipate that to be a little bit of a barrier. Ultimately, this is almost like an accumulation phase.
Another thing to keep an eye on is the fact that markets are reacting less and less to the random comments coming out of the Trump administration or even the Iranian delegation or government. Quiet is good because eventually that leads us back to the interest rate correlation and the quieter the markets are, the more likely it is that interest rates are dropping as well. It all ties together quite nicely.
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