Gold finally catches down - what's next?
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Thursday, gold lost support at the trendline we had suggested last week (shown below). Although the metal is very oversold, and a tradeable bounce may be on the very short-term horizon, gold bulls should be aware of the possibility of $1,850 - $1,860 becoming resistance. The corresponding level may be around $22.10 for silver.
Zooming out to look at Fibonacci retracement levels shows more firm support for gold at around $1,765. Of course, the round number of $1,800 may act as a springboard for that short-term tradeable bounce first, if this short-term bottom isn’t already in this morning. The speculative bounce may coincide with a brief cool-off period in USD strength as the DXY retests its break-out.
The same applies to the very heavily oversold US stock indices, whose stage is still set for a relief rally in the face of extreme fear and bearish positioning. Traders looking to capture short-term moves in this environment, in any asset class, should have the utmost respect for stops.
Thanks and have a great weekend.