Right now it’s all about interest rates in the dollar when it comes to everything, let alone gold.

Gold markets pulled back a bit from the 200-day EMA as we continue to see them look very likely to consolidate in the short term. Having said that, it is worth noting that the $1800 level has formed a little bit of a “double bottom”, so that might be worth watching. In fact, I believe that the $1800 level is a significant support level that a lot of traders will be paying close attention to. Because of this, it’s very likely that we will see buyers come into this market to try to take advantage of value somewhere near that vicinity.

As long as we can hold above the $1800 level, the gold markets have a significant chance of recovery. In this scenario, one would have to think that inflation concerns may drive the value of gold higher given enough time, but at the same time, we have high interest rates, which have been working against the gold markets. This is why I think things will continue to be very noisy and choppy, so you cannot get too aggressive one way or the other. You need to let the market tell you where it wants to go.

On the upside, the most obvious barrier that I see right now is the $1880 level. If we were to break above there, then it’s likely that the gold market will go to the $1920 level, and then eventually the $2000 level. This is a big move, and obviously would not happen overnight, but it certainly would capture a lot of attention. With that being the case I think the gold market is one that is trying to set up for a bigger move, but you need to be cautious about your position size until it confirms that type of scenario.

If we break down below the double bottom, then I think the market will look at the $1750 level as the next target. That could be a rather quick drop, probably caused by a massive spike in the US dollar. In fact, pay close attention to the EUR/USD currency pair, because the chart looks almost identical, so one could lead the other in this situation. Regardless, right now it’s all about interest rates in the dollar when it comes to everything, let alone gold.

The markets continue to be very noisy, especially as we have seen so much in the way of concern with the economy, the war, and inflation.

The German index has pulled back a bit during the trading session on Wednesday to reach the 50 Day EMA again. This is an area that we had broken through during the previous session, so now we need to determine whether or not this is a simple pullback and retest it, or if it is the market acknowledging the area around the €14,900 level as significant resistance?

The DAX has broken higher over the last couple of days, and this suggests that perhaps a bullish flag has just kicked off. However, we need to get above the 200 Day EMA to confirm this. We are in an area that has a lot of noise, to say the least, and therefore I think you will probably get more of a sideways choppy action out of the market than anything else. If we were to break down below the €14,250 level, then the market more likely than not will unwind completely. It does look as if the market is going to continue to see a lot of volatility but given enough time it is possible that we see a decisive move. I believe that the next couple of days will give us an idea as to where we are going long term.

Keep in mind that the DAX has been a bit overextended, but we also recently had a bit of consolidation, which suggests that we may have worked off some of the froth. All stock markets that I follow right now I have been extraordinarily overdone in the short term, but that does not mean that they can continue higher given enough time. The candlestick from the trading session on Wednesday wiped out all of the gains from Tuesday, so waiting to see where we go next is the best way forward.

The market is currently sitting between the 50 Day EMA and the 200 Day EMA, which typically leads to some type of squeeze. It is all lining up for a bigger move, and now we need to see which direction we break. The markets continue to be very noisy, especially as we have seen so much in the way of concern with the economy, the war, and inflation. Just during the Wednesday session, estimates of GDP and Germany were taken down quite drastically.