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's Fight to Hold $2350

April 10, 2024 - (Gold Market Wire) - As we anticipated, $2350 was going to be the place to pause. The length taken from the break out at $2206, which was our resistance and "sky ball" warning, should now be cut back.

pause to retrace - or finish the move to resistance?

Although its nice to have such "problems", they still exist. Keep running or cut some length? On the next to last move higher we lost about $50 of upside action, by expecting a back and fill that didn't come. This led us to pen the article called "The Case for a Gold Reset". Still, much earlier than that, we had warned that it was time to increase the core position. That has given us some solid coverage. With regards to the core, we still see the need for an iron grip. We, truly, doubt, that it will be worth parting with any of it - any time soon.

...Now, to the trading book.

Our identification of $2350 has worked. And we are going to abide by it. A solid move below means its time to start cutting. If we close the week below $2350, a big profit take is in the offing - say 75%. Greed can get the better of even the best of traders, and pocketing profits is all part of the game. In one sense we are glad the market is dithering here. It shows that its possible to remain at these elevated levels - as an new atmosphere for Gold.

We remain, more than ever, convinced that Gold's move has just begun. We firmly expect $3250 /.oz for Gold, within the next 12-24 months. The only question for us is how we get there, and not getting chopped up in the churn. Trailing length in way out of the money puts is expensive, but if done in small size, could help. We should be prepared to bid 10-15 Delta items with three month expiries. Counter parties looking for Risk Reversals/Fences/Zero Cost Collars will be our friends. Bid the downside wing and wait for them.

We should also keep our eyes on Silver, which could portend a move back down.

and the zoom out

power uptrend near vertical.

Lastly, we would be remiss if we did not mention the possibility of an Israeli attack on Rafah, and its threat of a very serious regional conflagration. How does one flatten the book in such circumstances? Only by holding the core! Will Netenyaho risk a regional war with Iran? The problem that overhangs everything is that the whole region could go up inflames at a moments notice. If ever there was a scenario that carves out $100+ oil - we are getting very near it.

Late Note - after the CPI release: Our touchdown on the power uptrend worked perfectly. Charts do work!

...right to the line.
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