Contributed Commentaries
Gold under 1930 with lower to go? S&P sell the news back to 4195?
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
In what should be no big surprise to regular readers, spot gold has retested, and as I write, is trading below the $1,930 spot. Is it time to buy? As a trader, I will be looking for signs of panic in the bull camp as another indicator that the time is right to get back in for a sustained upward move.
I will also be looking for momentum to stabilize on the weekly chart (shown below). Two or three weeks ago, I postulated that $1,850 maybe in view before a breakout and run over the all-time highs; the 50-week moving average and bottom range of weekly Bollinger both correspond to that area (just a bit lower as of now).
On Monday, I suggested that the mainstream financial media apparatus (and major wall street banks) finally flipping bullish on stocks added to the weight of evidence supporting a short-term top in the S&P. Right now, it looks as though yesterday’s announcement for a rate hike pause from the FED was/is a "sell the news" event, at least on a temporary basis.
The below daily chart show shows an open gap. I believe the price will come back down to close, while momentum cools off for a move down to its own upward-sloping trendline. Note how 4195 now also roughly corresponds to the 50-day moving average. We cannot tell whether it will get all the way back down there in a hurry or if it will reach that level to the downside at all, but in my opinion, the probability is that a cooling-off period lies ahead, at the least.
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