Interest rates continue to be the main driver of the gold market, as well as everything else.
Gold markets have been pretty noisy during the session here on Thursday as we initially saw some type of panic based on, I suspect, the Donald Trump speech. It was around the same time, which was odd considering he basically said everything that he's been saying for days now, so I'm not sure what changed.
Regardless, interest rates spiked and that sent gold much lower, crashing down into the 4600 level before turning around and bouncing. We are still playing the geopolitics game right now and I think that is going to continue to be how these markets behave. They just simply run wild in one direction or the other based on the latest headline or possibly the latest rumor.
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With this, I think you have to keep in mind that it could be very dangerous to put big positions on in this environment and because of this, I think dipping your toe into the water might make some sense, but I'm definitely not looking to get too big. Furthermore, keep in mind that the futures markets will be closing early on Friday as it is Good Friday and therefore a major holiday.
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But this is a scenario where traders could be very aggressive on short-term moves only to see the market blow up in their face. After all, it only takes 1 tweet or 1 random statement to have the markets and by extension the algorithms completely lose their minds and throw the market back into a tizzy. I am constructive on gold long-term, but the problem is we have to get through a bunch of random potential earthquakes in the macroeconomic environment to really start to put money to work. If we can break above the 50-day EMA, that would add more confidence.
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