New Month, New Quarter; What's New For Gold?
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Gold has been consolidating for months. In fact, the entire first quarter was traded in a big range. Gold never broke out to the upside or broke out to the downside. There have been many false starts in both directions, but each time, gold came to that key moment it reversed and went the other way.
There is no end in sight for this wide consolidation pattern, but it will break out one way or the other; the only question is when. For now, the trade is to sell the top end of the range and buy the bottom end. That trade will work until it doesn’t. Market patterns repeat themselves over and over again, looking for a reason to break out either way.
The economy and the dollar will be contributing factors to which way these markets will break out. We expect a much stronger dollar, which typically would be bearish for gold. However if the dollar becomes the black-swan event, we expect it could be positive for gold. This is why the metals remain in consolidation, searching for a reason to break out. Let the footprints be your guide and wait for the breakout in either direction.
Keep those stops tight.