Gold building a base
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Featuring views and opinions written by market professionals, not staff journalists.
Thursday, Super Mario Draghi, in his swan song as the head of the European Central Bank cut rates and added more Quantitative Easing. That action sent the gold market soaring higher pushing the yellow metal up almost $30.00 before settling about $5.00 higher for the day.
The fear and panic of gold collapsing has subsided for now and the $1,500 level December futured held. The rally was part short covering and part the ignorance of the ECB actions. Next up is the Fed and what they will do with rates.
While markets are pricing in a .50 bps cut; President Trump wants more but the bond markets are telling a different story. The pounding of bond futures signaling higher rates suggests that the rally in gold Thursday was as much short covering from those who had panicked to uncertainty of the global economy. Just remember price dictates everything, as long as $1,500 holds gold will go higher, it’s that simple.