News, analysis and commentary for gold traders and investors

"Be Right - Sit Tight"

Jesse Livermore
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Gold Market Wire

News, analysis and commentary for gold traders and investors

Gold Market Opening

Gold Falls Back after Fed Rate Cut Boost

March 16, 2020 - (Gold Market Wire) - Gold prices got a short-lived boost in Asian trading, after the US Federal Reserve cut its target interest rate to 0%-.25%.

The market traded up to $1575/.oz but quickly surrendered the gains. Gold is now closing in on critical support just above $1500/.oz.

closing in on support

Just to give some long-term perspective to this line, we'll back it up for a wider look.

we've stayed above this trend-line for nearly 9 months

The Fed rate cut has done little to move gold higher. Why would it? The Fed will buy Treasury assets and flood liquidity into an illiquid market, but all the money printing in the world will do nothing to inflate an economy where banks refuse to lend money and are simply hoarding cash. To anyone who followed (Bridgewater) Ray Dalio's advice that cash was trash, you can see just how trashy it isn't right now. Stocks have been liquidated, gold also...but cash, right now, has been a great place to be. Still, Gold is off just 12% from the highs at $1703. In an environment like this, its not too shabby. You could, after all, have stayed with Bitcoin - and seen your life flash before your eyes.

Being long gold isn't the perfect trade every day of the week. The market goes up and it goes down. Nothing moves in a straight line. The challenge is knowing when to buy, when to hold, and when to fold and stand on the sidelines. We warned, back at $1635.50 and $1643 that gold was coming under attack.

The market has a challenge in front of it - a significant one. It's no time for heroics. Let's watch and see what the market does with the marker around $1500. If it doesn't hold, we'll likely get another leg down. If it does hold, there will be plenty of time to establish length.

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