Gold markets have formed a little bit of a “double bottom” in the short term, but at this point time I think that the market needs to break above the $1750 level before we can continue to go higher. If we do break above there, then it is possible that we go looking towards $1800 after that. That being said, a lot of this could be short covering, as we have seen yields drop recently, so that of course does help gold, but if yields start to spike again, that could send gold much lower.
Gold Price Predictions Video 02.04.21
The gold market has an inverse correlation to yields, and with Friday being a holiday, there will be very limited trading. Because of this, I would not expect too much during the trading session but will start to pay close attention to the action that we see on Monday, as that will be when a bit more liquidity comes back into the market.
If we break down below the lows of the last couple of weeks, that will open up the floodgates to send gold down to the $1500 level. It will be interesting to see how that plays out but at this point time I think we need to be cautious and simply wait for the market to make an impulsive move to get involved. Although the last couple of days have been rather bullish, it is still very early to determine that the market is reversing. I think some time by the middle of next week, we should have quite a bit more clarity, and obviously we need to pay attention to the 10 year yields to see how this market may go.
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