Solid day from gold but it needs some perspective
Gold might have gotten ahead of itself in the past month. The spiraling trade war undoubtedly sparked an excess bid for safety and the latest walk-back from both sides dampened those fears.
At the same time, everyone got a bit too long, too fast.
So there’s been a reckoning and some of the weak hands have been shaken out. Was four days of heavy selling enough?
Gold fell $71 in a week, a drop of nearly 5%. That led to much larger drops in gold miners as sentiment shifted. Today’s $12 gain is hardly consequential given the circumstances but I think it’s a sign that
So far the decline has stalled at support at $1480 but there are major risks around the ECB and I fear the market may have priced in an unrealistic amount of easing — especially given the ECB’s well-publicized preference to ‘surprise’ markets.
If it breaks to the downside, the next level to watch is the 100-day moving average at $1464.