Gold teetering while Bitcoin breaks out - Will the tides turn soon?
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
The red flags have been mounting in gold for a few weeks now - and likely to no surprise to regular readers, my opinion continues to reflect caution; today, more so than over the last month.
The below daily chart shows the rejection at the prior upward trendline proving itself stiff. The $1930 spot is once again broken to the downside, and daily momentum looks on a firm downward trajectory into oversold territory.
Without a crystal ball, I cannot tell whether we still see $1850, but my opinion is that lower prices lie ahead, perhaps in a capitulation move down that would shift sentiment from neutral to outright bearish in a sign that a bottom is forming.
The cooling-off period I eluded in stocks last week seems to be playing out as well. The below is an update of the daily chart I showed last week at the price top in S&P 500 futures. My opinion remains that the open gap is a reasonable expectation for a downside target. I think momentum should reach back down to its upward-sloping trendline as well.
I can only hope that no regular reader is surprised at the massive breakout in Bitcoin. Below is a weekly chart showing the extent of the breakout along with a demarcation (in blue) at 32k resistance. It stands to reason that the 32k target is in view, and bulls in position can let the trade play out, in my opinion. As a matter of fact, should the velocity of this breakout be maintained on a closing basis this week, I would be on the lookout for a move beyond 32k before another local top.
Note weekly momentum, indicating a quick turn back up, with tons of room over-head to let the wider scoped inverse head and shoulder formation play all the way out.
Thank you, and good luck.