Gold markets have been very noisy to say the least as the interest rate markets continue to be very elevated and as long as those rates are high it is going to give gold a bit of trouble.
The market is sitting just below the 50-day EMA which is a major technical indicator that a lot of people will watch closely.
Ultimately even if we break above there then the $4800 level comes into the picture as a bit of a ceiling. Short-term pullbacks look at $4600 as support but they also will watch the $4500 level for a bit of support as well.
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Ultimately I think this is a situation where a lot of traders will be looking at this through the prism of what's going on and at the same time the interest rates of course have a hugely negative correlation to gold as gold is a non-yielding asset and therefore I think you have to watch that negative correlation very closely.
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Ultimately, I do think we will get a bigger move to probably the upside, but we need some type of clarity out there when it comes to the Middle East situation as the interest rate markets are pricing in energy inflation.
With that being the case, it makes a lot of sense that rates continue to stay elevated and therefore suppress momentum for precious metals. That being said eventually we will get some type of resolution and gold takes off to the upside. I would not hold my breath though as it certainly isn't going to happen easily or necessarily in the immediate short term.
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