Investors are looking to bonds more than gold as of late, with higher interest rates in America causing issues for gold bulls. Ultimately, everything is running on the idea of “stagflation.”
Gold
Gold markets continue to be very noisy during trading on Tuesday, but they're hanging in there considering that as it has had just last week its worst performance in decades, it's starting to at least find a little bit of stability.
Part of this is based on stagflation fears in the United States forcing the Federal Reserve to hold its interest rates going forward and markets have completely priced out 2026 rate cuts. Investors currently favor the US dollar and high yielding treasuries over non-yielding bullion, trading gold more as a source of liquidity, forced selling if you will, than a refuge.
TECHNICAL LEVELS AND MARKET SENTIMENT
There does seem to be significant support at $4200. We also have the 200-day EMA there, so with that being said, it does make sense that it'd be of a lot of interest. If we rally from here, the $4600 level could be resistant right along with the $4500 level as there was a zone of support that was violated.
Yes, we formed a nice-looking hammer on Monday, but it takes more than a candlestick to move a market. I do think that gold is more or less in a wait and see mode or perhaps a hold until it proves itself type of situation.
I don't necessarily want to short gold, I just don't necessarily want to buy it without some type of momentum and more importantly, the 10-year yield in America dropping. Until that happens, I think gold is going to continue to be suspect at best and therefore I'm more or less monitoring here. A clearance of $4600 would be a very positive sign though.