• Gold markets have struggled a bit during the trading session on Thursday, as we are threatening to break back through the 200-Day EMA.
• At this point, if we do I suspect that it will confirm that to be a bit of a “throw over”, suggesting that the $1800 level above is just too far to continue to the upside.
• Ultimately, a lot of this comes down to the Federal Reserve and interest-rate expectations, which are a very fluid thing, to say the least. I should say interest rates are fluid, not the Federal Reserve.

The Federal Reserve continues to speak of hockey shyness, and this should continue to work against gold. Even if it does not, at the very least you probably need to see a bit of a pullback. Yes, we have had an explosive move to the upside, but momentum can only last for so long. The 50-Day EMA is near the $1700 level, so that makes as good of a target as any other. Keep in mind that you need to pay attention to the 10-year yield because the 2-year yield in the United States hasn’t moved. That’s the yield part of the curve that the Fed controls.
 

I Don’t Expect Significant Changes

If we were to turn around and take out the $1800 level to the upside, that would obviously be a very bullish sign, opening another $50 rather quickly. Given enough time, I suspect on that move we could go as high as $2000. The $2000 level is of course a large, round, psychologically significant figure, and has people looking for the exits. There will be a lot of profit-taking in that area, and perhaps a lot of people willing to short the market.

If we fall below the $1700 level, at that point I would anticipate this market going to test the lows again. However, I think the only thing you can count on is a lot of choppiness right now considering there are so many random things pushing the markets around. Geopolitical factors, inflation, interest rate expectations, Federal Reserve speakers, and information links from the ECB earlier in the day all have had an influence on what gold is doing. I don’t expect that to change anytime soon, but in the short term, I think at the very least we are overbought.

(Click on image to enlarge)

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