Gold initially plunged during trading on Thursday as we continue to see a lot of noisy behavior.
Initially during the trading session, we saw interest rates rise in America and that put quite a bit of downward pressure on gold.
But we ended up seeing the rates fall after that and it ended up showing signs of life in the gold market bouncing from the 200-day EMA.
This is a market that I think given enough time probably has to go looking to the $4,600 level. The $4,600 level is a level that previously has been support and resistance, so I think it would make quite a bit of sense that we would see a lot of choppy volatility in that area.
Interest Rates and Technical Resistance
If we were to break above the $4,600 level, then it's possible we could challenge the 50-day EMA, but I don't see that happening without the interest rate markets really starting to show lower yields. We are dropping during the day, that's obviously a good sign, but we probably aren't quite there yet to get overly bullish.
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Ultimately, I do like this as a market that we get involved in and gradually go higher over the longer term, but I also recognize short-term volatility, and noise will continue to be a massive issue.
If we were to break down below the 200-day EMA, that could really send the gold market much lower, perhaps down to $4,000. In that environment, I would expect to see interest rates really start to climb in that situation. At this point, almost nothing would perform well.
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