On Monday we suggested that bulls should remain open to an upside surprise going into FOMC. That surprise manifested early on Tuesday, pre-market, with a weak CPI that sent everything up, except the USD. Gold hit a higher high at $1820 before reversing back under $1810; another example of how important that level is for bulls to jump across on a closing weekly basis. There's an old idiom that one who "talks tough" is actually holding a weak hand: Is the market ready to continue to call Powell's bluff following his hawkish talk on Wednesday?
In this trader's opinion - the below 4-hour gold chart continues to indicate that dips should be bought. On Monday we showed the same rising trendline for support, and suggested that if broken, a trip to $1762 -$1750 would follow; for now the low is in at $1775 (spot gold).
Silver, although subjected to amplified volatility, has actually held it's rising trendline, and looks ready to continue the pattern – Also shown below on the 4-hour time frame.
Finally, the SPY (shown on 4-hour chart): We mentioned an open downside gap that may have to fill after all. However, without the crystal ball we can't know whether we will get the famed late day Friday ramp in stock indices today, or perhaps a "turnaround Tuesday" early next week. In this trader's opinion, this dip is still an opportunity for those looking to catch a ride on a possible Santa rally.
Thanks and have a great weekend.
