Gold Market Wire
News, analysis and commentary for gold traders and investors
Gold Market Opening
Gold Takes A Beat Down
October 14, 2020 - (Gold Market Wire) - Yesterday's warning that the downtrend established by Monday's highs had the potential to cause trouble for Gold has been borne out by the market. The newswires are ablaze, trying to come up with any reason for the move...This time its worries over "lack of stimulus" and "fears of a hard BREXIT"... the old standbys for journalists. Yes the dollar put in a decent show yesterday, but that can't explain the continuation a trend established. The truth is simply that the market is failing and is caught in a technical downtrend, and the forthcoming US election has everyone on hold. The market, that great discounting mechanism, is discounting future electoral chaos. That means a central bank whose power is diminishing. Note that the US Dollar still hasn't challanged 1.22/23 to the Euro on the downside. This is a Gold story and the chart lays out the picture:
As we can see, that high on Monday was an important marker. We've bounced off the trend line this European morning, butthat trend line has to hold, or we will slip into the lower reaches of the channel and continue our journey lower. With our upside break of horizontal resistance at $1906 last week, and the subsequent follow through we should have been building a staging ground for a real rally. Instead, we have stalled out. Our worries of a continuation of lower highs are getting confirmed, and that isn't a good sign.
Bottom Line: Get out of the downtrending channel, and soon, or we continue to head lower.