The gold market has gotten hit hard as rates jumped in the USA early on Thursday.
The gold market has gotten absolutely pummeled during the trading session here on Thursday as yields in America continue to capture everybody's attention. Quite frankly, this is a market that is going to be very noisy, and it did potentially at least make a nice double top. Whether or not that ends up being the case permanently remains to be seen, but we had been watching this area between $4,600 and $5,500 previously.
We did pierce the $4,600 level but this isn't the first time. It does look like the buyers are coming back in and for what it's worth, the 10-year yield has pulled back from that crucial 4.30% level.
Volatility and Risk Management
If it remains underneath there, then I think it gives gold a little bit of a lifeline, but if it suddenly spikes, that could be very detrimental to gold, and we could find ourselves down at the 200-day EMA quite quickly. I'd be looking to play the bounce here, but I would not become a hero; I would not be throwing half my account into this.
I don't think it's an environment that's very conducive to taking huge risks because of all of the noise going on in the Middle East, the bond market, and of course the fact that the Federal Reserve was quite a bit more inflation concerned than people thought they would be. So interesting days we find ourselves in. I do think that we need to watch this $4,600 level very closely for the daily close. If we are above there on some type of reasonable bounce, I think that could end up being a buying opportunity, but hang on to your hats, it's probably going to be a very volatile trading session.
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