The gold market is currently trying to break higher, but we find ourselves being stuck in the same range we have been in for some time.
Gold
The gold market continues to see a little bit of upward pressure on dips, but we have given back some of the gains.
It is worth noting that part of what is going on is that traders are jumping into the bond market and buying bonds, driving down yields. At least that is what had happened in the middle of the week. On Friday, we saw a little bit more of the same initially, but now it looks like rising rates are putting a little bit of downward pressure on gold.
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At the end of the day, we are basically testing this overall consolidation area between $4,000 and $4,200. With this being the case, the market is likely to continue to see a lot of buy-the-dip attitude as long as rates do not go crazy. But if we can break above the $4,250 level, then we could see a little bit of upward mobility in gold.
Rates continue to matter here
Again, I need to see those rates dropping. If rates start spiking again, then I think that drives down the gold market. Anything below $4,000 will be a major turn of events, and it could see gold really fall apart.
With all of that being said, I think it will take some time to make that happen, if it is, in fact ready to happen. Gold, I think, eventually does take off to the upside. The question is, do we need to break this major barrier first?
Longer term, I do like gold, but in the short term, this is all about rates. Rates jumped later in the day, and you can see gold has given back some of the initial strength. I think the overall choppiness here continues to be a scenario where short-term traders are probably going to be very nimble and active.
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