Any Upside In Gold

So yesterday we looked at the downtrends in Gold and Silver, today we just may look for some upside follow through. We had another down day in US Stocks, the Euro, Oil and just about every other currency and commodity on the board. There is a mess with Russia and it is starting to impact all the markets even the raging bull US stock markets. The Dow Jones shed another 140 points today and the S&P 500 was down 18 points settling at 1920.

As for the precious metals, Silver did break below $20 early this morning but there did not appear to be a panic to take prices much lower, for now anyway. Silver seems to have found light buying support above the 1975 level. Gold did break lower this morning and traded as low as 1282, surprisingly, the 1280 level did not get touched. I was surprised by this, given the fact that the US dollar was strong across the board for the entire day. Lets look at the price action from today, Gold did not make a lower low, notice that the low today was a touch higher than the past low from this past Friday. Also notice that the surge in the price today stopped dead in its tracks at 1295 and then surrendered about half of the gains by the days end. The chart below is of the hourly time frame so you can see clearly what has developed in the price action from Tuesday during the US session.

With this price action from today, we want to see Gold take out 1295 and then 1300. With the developments or stories coming out of Russia and The Ukraine, Gold may be worth a look here, being that 1280 has held, for now. Gold does have several headwinds  currently and that is the US dollar strengthening and the fact that the perception is that the US will have to raise interest rates sooner than later. Notice how I used the word perception, these markets are all about perception and right now there certainly is a fear brewing about rising interest rates here in the US. Today the US data had another strong number with the Services ISM coming out at 58.7, this was the strongest release since 2005.

I am of the opinion that the US Dollar, long term, will fall and that the FED is in no hurry to raise interest rates. It does not matter what my opinion is to the market, right now the market, at least the currency market is thinking the FED is indeed going to be on a rate hiking trajectory and I am not here to argue with the market. For today I look for a bounce in GOLD above 1300 and Silver back above 20, if it does happen, we just may be on to something bigger. If the bounce does not
materialize, we know our risk, at least I would hope! Just be quick and nimble, pull the trigger!

TraderMartin