Gold is sitting just below the crucial $4,600 level on Tuesday, an area that we must pay close attention to.
Gold
Gold markets got hammered on Tuesday as traders continue to react to the bond market. Yields in the 10-year yield in America have jumped again. And with that, it shows that there is a lot of concern and it basically just brings in US dollar strength. This of course is toxic for gold.
However, and this is something worth paying attention to, gold is sitting just below the crucial $4,600 level, so we should see a little bit of interest in this market somewhere in this area. With that being said, I think bouncing from here opens up the possibility of reaching the 50-day EMA.
The Impact of Interest Rate Markets
A breakdown below the $4,500 level could open up even further selling and I suspect that probably comes with interest rates jumping. All things being equal, you're going to have to watch interest rate markets which are watching the clowns running our countries release certain statements and tweets back and forth at each other manipulating the market and risk appetite.
As long as that's the case, the one thing you need to keep in mind is your position size is the only thing you can control. So, with this being said, I do believe that this is going to be a very difficult market to trade in. I also recognize that this is all about the bond market, which is all about the headlines coming out of the Middle East.
Until we can actually get some type of progress there, the bond market is going to be very nervous. That being said, if we get a signed peace agreement, that could be the day that the 10-year yield drops well below 4.30% level, probably almost immediately and that will be like rocket fuel for gold. Unfortunately, we don't know when that is.