15:08, 08 April

Market Recap

On Wednesday we looked at Gold which looked likely to break bellow support of $1285 and perhaps head lower.  This key level provided a level of both support and resistance during much of January of this year.  We returned to this level of support at the beginning of March and again near the end of March.

This level of support is still the floor of a head and shoulders pattern which may yet be broken.

As of this morning we have seen a rise to $1298, still well above the 200 day moving Average.  On the daily chart we are seeing what could be considered a descending triangle but we will have to be patient to see if price increases to touch the upper trend line of the triangle.  We saw a high of $1246 in mid-February and another attempt to the upside later in March to $1224 so we are definitely seeing lower highs.

Breaking below would see the next level of support at $1240 and the next major level at $1200.

During 2018 many central banks, large and small, were known to be buying gold for their reserves, keeping the bull run alive.  We have just seen the PBOC increasing China’s reserves for the fourth month in a row making them the second largest buyer of the precious metal behind Russia.  Even as trade negotiations with the United States are making progress, albeit slowly, there are signs that the Chinese economy may be faltering.  The fundamental questions for gold are then, will we see more “safe haven” buying, and will we see a massive sell-off by central banks at the next levels of resistance.