The gold market rallied on Wednesday, as traders reacted to falling rates in the US. At this point, any hope of rates dropping could bring buyers into the market.
Gold
The gold market has rallied a bit during the trading session here on Wednesday as it looks like we are trying to take out the $4,600 level but so far, we have not seen that happen. Ultimately, I think this is a situation where we are just moving at the latest headlines and moving at the latest rumor.
After all, when it was suggested that the Americans sent a 15-point peace plan to Iran, we saw a lot of momentum to the upside as rates in the United States fell and of course the US dollar softened a bit. Since then, we have seen a little bit of noise, but this is a scenario where now we have to have some type of reason to actually break above the $4,600 level.
Macro Factors Impacting Gold
The $4,600 level continues to be a major barrier. Breaking above that opens up the possibility of gold going to the 50-day EMA, but I don't think that is going to be the easiest thing in the world to happen.
If we pull back from here the $4,400 level could be a bit of a floor in the market. We have the 200-day EMA at the $4,200 level. Ultimately as long as we can stay above there then it is likely that the uptrend is somewhat intact.
However, we have to realize that this is mainly about the 10-year interest rates in America and what they are doing. As things stand right now, they are still uncomfortably high and that does put a little bit of a lid on the gold market. I'm slightly optimistic but I also recognize there is a lot of work to do.