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.
