Gold Market Wire
News, analysis and commentary for gold traders and investors
Gold's Return to Reality
June 11, 2020 - (Gold Market Wire) - Interest rates aren't going up anytime soon. The Fed conceded that yesterday, and Gold did its standard dance on the back of it. But then, it realized that there wasn't really anything 'new' about the news. The crack cocaine high wears off quicker and quicker, and now lower rates to zero and beyond aren't giving any kick beyond a few minutes. That's what we got yesterday. For the spec trader, a great signal to sell. For the amateur a time to chase over the cliff, while shouting "This is it!"... one more time.
In the cold light of dawn, it's a time to re-assess and recognize that Gold has some real challenges to overcome. The chart tells the story:
Market fireworks seems to always hide a truth, the ones no one wants to hear... and they often serve as a contrary indicator. Money printing is going to go on forever and Gold is going to the moon as a result. Well...maybe. But that does nothing for us today, in the trading arena. Today we are faced with reality, not dreams, and the reality is a down trending channel and a series of lower highs.
Could the market turn around and vault higher. Yes, it could, and truthfully it better, because the chart formation isn't that encouraging. $1765.38 back almost a month ago is still the high, and not even Jay Powell's trumpet blast has changed that. We need to get over the downtrend line, which is about $2 away from yesterday's intra-day high ($1740) which we also need to clear. Those are the challenges to break the spell of the down channel, which, right now, and until those challenges are cleared, is holding sway.
You can't wish away the reality. You can prepare for it, though. We have our targets. The market needs to get a move on. The power uptrend is damn near vertical, and that is going to be tough to hold.
It's going to take finesse to handle the market today.