With Jerome Powell speaking during the day, Core PCE numbers coming, and of course the jobs number on Friday, gold will more likely than not be very noisy.
- The gold markets initially tried to rally during the trading session on Wednesday, to break above the 200-Day EMA, but just as we have seen multiple times this last week or so, there has been selling pressure.
- Furthermore, the campsite forming a bit of a shooting star suggests that we will continue to see a lot of problems.
- With Jerome Powell speaking during the day, Core PCE numbers coming, and of course the jobs number on Friday, gold will more likely than not be very noisy.
Underneath, we have the 50-Day EMA near the $1700 level, and it is rising. I could offer a bit of dynamic support going forward, and perhaps could offer a little bit of a target for moves to the downside. On the other hand, if we turn around and break above the top of the shooting star, that opens the possibility of the $1800 level. The $1800 level is a large, round, psychologically significant figure that a lot of people will be paying attention to, and therefore think it’s likely that we will see a lot of noise in the general vicinity. If we were to break above there, then gold could go as high as $2000 over the longer term. That obviously is a large, round, psychologically significant figure, and a lot of people will be paying close attention to it if we get there.
Ultimately, I think the one thing that you can probably count on is a lot of noisy behavior coming out of this market, which probably is not much of a surprise considering that gold is highly sensitive to the interest rate markets, and of course the US dollar. Therefore, gold is going to be so difficult during the week, as we have a lot of different things over the next 3 days that could move both of those markets quite drastically. Ultimately, the volatility should continue, and therefore I think you should be cautious with your position sizing more than anything else at this point. The next couple of days could determine where we go for the next month or so, so pay close attention to all the boundaries that we have seen play out over the last couple of weeks.