The gold market has been fairly noisy during the trading session on Thursday as we initially did try to rally, but it looks very much like a market that is moving in reaction to interest rates.
The interest rates in the United States that I follow the most would be the 10-year note and it is currently hanging around the 4.30% level.
The 4.30% level seems to attract a lot of attention from traders in multiple different markets as it can send, when above the 4.30% level, traders into a bit of a safety mode. It also has them running to the US dollar. So, when you have an asset like gold which is non-yielding, it makes a lot of sense that perhaps bonds are a bit more attractive with that rate and people simply don't want to pay for the hassles that come with storing gold.
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That being said, we are currently dancing around the 50-day EMA, and I think that's something worth watching. It's a technical indicator that a lot of people will be closely monitored and a short-term pullback from here could open up a drop down to the $4,600 level. But I think there would be even more support in that region, and I do think that buyers would be willing to get involved.
To the upside, I think the 5,000 level is an area that a lot of people will be watching because it is a large round psychologically significant figure and an area where we've seen significant support and resistance in the past. The idea of getting to that next big figure does make sense to me, but that doesn't mean we get there right away. It also doesn't mean that it's an easy move. I prefer to buy short-term dips, but you have to keep an eye on the 10-year.
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