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 Update

Gold Fights Downtrend

October 13, 2020 - (Gold Market Wire) - Gold has a downtrend that is now being enforced by yesterday's high, and it bears some attention. Its proximity to the 50-day moving average accentuates its role. The chart:

Perhaps unsurprising, the turnover/downward arc of the 50-day is applying some pressure. Gold will need to break through it to keep the rally going. No doubt, we had a solid move when the horizontal gave way at $1906 and caused our big gap up - but we need to follow through. We put in a low of $1873 on the 7th of the month and a high yesterday of $1933, so a 50% retracement (i.e. half of the $60 move) could take us back towards $1900... all perfectly normal as far as retracements go. Now that we've defined the downtrend in a more emphatic way, with yesterday's high, it will take on added importance. We must be wary that yesterday's high isn't another in a series of lower highs. Gold needs to prove that market as being wrong.

Backing up to look at the Fibonacci retracements, on a weekly level, we note the low on the week of August 13, 2018 at $1160 and a high on August 3, 2020 at $2075, with a 'double bottom' of $1849 on weeks 9/21 and 9/28 (2020).

That comes fairly close to our first fibonacci retracement level of $1859 seen above. Thus the $1850-60 region as support for the market takes on some added significance. The importance of the 50% retracement (above) is self-explanatory. The market must hold there if it is not to face a serious un-wind.

Now none of thisis to predict that Gold is coming under re-newed pressure over the long term. But it is important to know the markers to focus on. Especially as we are in the 20th/21st year of the Gold bull run.

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