Gold Market Wire
News, analysis and commentary for gold traders and investors
Gold Market Update
Gold Pushes towards Support
In many ways, Gold, because it's a thin market, in terms of trade, if not holdings, anticipates what the bigger markets do, in advance. Not always, but it works fairly well as a barometer. We've got our touchdown, almost, on the horizontal, which is around the $1808-$1810 level, with our intra-day low of $1815. That's close enough to call the movement complete, and was a solid enough point to buy some initial length, with a long-hold (as opposed to a scalp or a spec) in mind.
The reason? Simple. The US Dollar rally looks far from finished.
Right now, our bounce has been pretty weak. That is why we are sizing for a long(er)-term hold. How Gold will react to the next chapter in the series called "The Unstoppable Dollar Rally", can't be read, but at some point, when the Euro starts to flirt with parity again, people may turn to Gold and the US Dollar - together. Perish the thought!
As anyone who reads this blog regularly knows, we have employed this strategy for years, and it has worked out fairly well. Long Dollar vs Euro, Sterling and Yen... a core position of Gold, and a trading book, that likes Gold, from the long side, almost all of the time that it has a position.
And Gold has rallied against the US dollar - just not all of the time. The chart below tells that story, although 2022 was fairly ugly, which is why we sat a lot of it out completely. Yes, the charts don't lie....with seven straight months of downside action.
Since the end of 2022, the world has been up ended in what now appears to be something of a historical juncture of note. The US political system is collapsing, the EU is a basket case economically, and the war with Russia is not going to end anytime soon. We are of the firm belief that Gold's moment to 'shine' is about to come. Sadly, it will hardly be something to cheer about, as it will only indicate a continuation of the general global malaise that we have seen since start of 2020.