The gold market fell hard at the beginning of the week, as bond yields jumped. However, there are conflicting reports about the Iranians and Americans talking, so volatility continues.
Gold
The gold market broke down significantly during the trading session on Monday but turned around to show signs of strength as there have been words spoken that perhaps the Americans and the Iranians have been talking.
This has people thinking a little bit more risk-on and of course while that doesn't sound like gold, the reality is the US dollar calmed down, the 10-year yield calmed down and with that being said the market is likely to continue to see a lot of volatility.
Recapturing the $4,600 Level
If we could recapture the $4,600 level, it's possible that this market could go looking to the $5,000 level, but I would point out that this is a very fluid situation and that could really tear things apart. We've already had the Iranians talking about the fact that the talks have not progressed or that Trump has backed off after threats from Iran, so we'll just have to wait and see.
Ultimately, I think it is still up to gold to prove itself as being strong and right now I just don't believe it, but recapturing the $4,600 level would be the beginning of something that I think could send gold towards the $5,000 level. Unfortunately, this is all about the latest rumor and the latest tweet, so best of luck.
If we were to break down below the bottom of the range for the session on Monday, that opens up the trap door, we would probably crash through the $4,000 level. I don't necessarily think that happens easily, but it is something that you need to pay close attention to.