Gold Price Forecast – Gold Drops with Rising Rates

From Daily Forex, this is Christopher Lewis taking a look at the gold market. The gold market has been absolutely hammered during the trading session here on Monday as traders continue to see a lot of downward pressure based on interest rates screaming higher. As long as interest rates continue to rally, that's going to cause some issues for non-yielding assets such as gold and silver. The gold market is certainly getting ready at least to approach an area that might be important all the way down to the $4,000 level. So, I'm watching to see if we get some type of bounce. But, as things stand right now, we just don't seem to have it. The market selling off the way it has is the combination of fairly negative pressures resulting in something akin to a head and shoulders pattern kicking off. With the 10-year yield currently at 5.261%, it's a long way away from being stable enough for gold to attract a lot of buying interest. This isn't to say that gold falls to $0. That's not what I'm getting at. What I'm saying is there's a very real world in which you might be able to find some value, maybe buy some type of bounce. But, no matter what happens, you need rates to calm down before you can even think about buying gold. As far as selling it is concerned, that was a great idea about 8 hours ago. So, now we need to see whether or not the $4,000 level holds. Anything below there could be rather ugly.