The gold market has rallied a bit, gapping higher to kick off the trading session on Tuesday as traders continue to jump into this market. That being said, we have given back some of the initial gains, as perhaps we are getting a little stretched. It has been a pretty explosive breakout. We got a little bit of a boost on Friday after the jobs report came out negative for July, but there are still concerns in the Middle East that could cause chaos in the bond market, and that is part of our problem in the gold market, as the uncertainty is something that could continue.
Technical Setup and Bond Yield Impact
The bond market has been screaming higher in yield, and that works against the backdrop of owning a non-yielding asset like gold. That being said, the breakout was real. It was voluminous from the $300 range we had been in, but that doesn’t mean that the market has to go straight up in the air forever, and quite frankly, eventually gravity will get involved. That’s part of what we’re looking at here, I believe at this point.