Gold Market Wire
News, analysis and commentary for gold traders and investors
Gold Market Update
Gold Slips Beneath Trend Line
April 24, 2023 - (Gold Market Wire) - Gold has been on a tear as of late. Over $400 of upside action over what amounts to a half a year. Strong going, no doubt. Alas, nothing moves in a straight line.
So, once again, the $2050 level becomean area of interest. This time, we didn't even get the usual head-fake/high tick over the barrier - such was the eagerness to get out of the market. Our last push up, per our previous missive to 'look to get flat', gave us just enough lee way to do just that, and we are out of the (trading) market.
Truth be told, we even cut a small % of the core, which we think we can get back later, and, contrarian as it sounds, if we don't get some kind of a recovery this week, we might be looking at a spec short. Our job is to find the rhythm of the market - not to be a cheer-leader for the bulls.
In the recent past, Gold has done a fairly good job of predicting US Dollar strength in advance. Are we about to do that again? Well, the stall is set out. EUR/USD needs to get above 110.50 at the very least, and stay there into a weekly close, preferably a monthly, to reveal the next up leg for the Euro. That could keep Gold going. But are we going to get that next down-draft in the US Dollar?
Increasingly, we don't think so. Right now, the whole world is awash with "end of the Dollar" stories. Yeah, ok. "End" against what, exactly? Europe could turn into a continent-wide battlefield at a moments notice. As could Taiwan. We're not done with the Dollar just yet. And so, it behoves us to get out of what has been a strong run in Gold and wait and see.
The trend line above has to hold, for Gold. Up until now the market has done exactly what one would expect. We raced up to touch the (fabled)$2050 point (just short of it actually), and now, the six month move is complete. We'd rather wait for a weekly close above $2050, than try and establish length here. There's a much better chance to re-establish any trading length around the $1900 mark, if not even lower. The horizontal picture adds fuel to the the 'fire to be flat'.
This time around, the trading was fairly easy going. But that doesn't mean "long forever." We're flat. We're in wait and see mode. The odds are favouring a sell-off. If anything, we might be gearing up for a short-sell.
Monday morning musings.