<- Go Back
Gold Market Wire
News, analysis and commentary for gold traders and investors
Gold Rally Stalls Out
February 28, 2020 (Gold Market Wire) - Gold struggled right where we identified yesterday... and lost. It has fallen back into the channel and now has a very tall order in front of it before the weekly and monthly trading comes to a close.
Unless we get a huge move up to $1700 today, the market will settle out at a technically weak level and need some consolidation before it can make another run.
Two forces are now at work in the market.
One is the fear of going home for the weekend without gold coverage... but we think options activity has already covered most of the active traders.
The other force at work is liquidation to cover margin in equities which means gold goes out the window and the market takes another hit.
If you're not flat, wait for a bounce and get flat.
There is a small, but worrying chance that Monday could cause a dramatic equity market sell off. And when liquidation looms - everything goes out the window...gold included!
Don't listen to the perma-bulls. There will be plenty of time to assess the market next week. If we manage to fly to $1700 - somewhat doubtful - then seeing that level hold early next week will provide a better entry point than trying to catch a slowly falling knife - which could pick up speed in a stock market rout.
It's time to hit the sidelines and hold fire.
Another point to remember: Gold Volume was huge on the way up. If those longs decide to bail... that's a lot of liquidation coming into the market.
You don't want to stand in front of speeding train.