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 on the Ropes

November 12, 2020 - (Gold Market Wire) - A Battle Royale shaping up for Gold as all eyes turn to the critical $1850 level to see if it will hold. Right now, there is no doubt, Gold is on the ropes in the short term. Under the moving averages (50 and 100 day) and with a downtrending line that is a vicious barrier. Our long term trend line is also not encouraging now - but, hope of hopes, the almost triple bottom of $1850 remains in tact.

The chart:

far from encouraging...but $1850 is still holding

Gold has had a true wash-out, and will face a serious down move if $1850 gives way. The market is fixated on it, as it should be, and any serious breech will likely cause another dramatic sell off. For the nervous, the current rally could be a place to flatten out or lighten up the book if long. If courageous, one can hope for a close above $1850 today and tomorrow and stick with length...or perhaps by some cheap short-term puts in the $1700 range.

We also make note that the 50 day moving ave. is ready to slide under the 100-day, and that can be a very promising move...can, being the operative world. It is not a guarantee, in any way - but it has been a solid indicator over the past year for the start of a new Gold rally.

We note, amongst the general malaise that surrounds the monetary outlook going forward, the recent weakness in the US Dollar may, in fact, be coming to an end. EUR/USD truly needed to get above 1.22 to show signs of a dollar breakdown, and that hasn't really happened. A turn in the fx position may be something challenging Gold, but if it is in fact the case, it is likely to be only short-term in nature. Haunted by the spectre of 'perpetual bonds', the Euro rally may be running out of steam.

has the Euro failed to follow through?

These are the times that try men's souls - in many ways. The Gold market, that ultimate barometer of confidence, is no different really. We remain steadfast that the environment for Gold remains positive, in the main. The 'confidence barometer' is hitting ever lower levels, with no end in sight, and that is what Gold will feed off of. A stock market wipe out could drag Gold down, as could a newfound rally in the Dollar - but the monetary crisis that is upon us is not going away.

That is Gold's Ace in hole.

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