The gold market has rallied slightly during the trading session on Monday as we are trying to recapture the $4,600 level.
Keep in mind that Memorial Day would have kept the liquidity down in the futures market, and of course, we also have other holidays in Europe that would come into play. So, with all of that being said, I think you've got a situation where we're watching the 10-year yield. We're going to watch what's going to happen with the situation in the Middle East, and quite frankly, if the Middle East were to see peace break out, that should drive down yields and drive-up gold.
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I know a lot of you have been waiting for gold to become the safety asset, but the reality is as long as you get paid so much interest in the treasury markets, it's a much easier trade for larger firms than going into the gold market.
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So, with that being said, I'll be watching the 10-year yield. We'll see how that plays out. Ultimately, I think this is a market that will remain very choppy and volatile, but I do think short-term pullbacks are to be bought into until we break below the 200-day EMA.
To the upside, we have the 50-day EMA that is going to cause a bit of a barrier. If we can break above there, then $4,800 gets targeted next. This will be all about the bond markets from everything that I can see. That has been the pattern for some time.
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