Gold
Gold held inside of the previous week’s range all through last week.
In fact gold only had a range of $150 last week.
In fact so far this month we have moved less than 25% of the range in August.
Despite a stronger than expected CPI number On Friday gold recovered which could indicate that there are short positions out there expecting a rate rise this week.
However this week’s key risk is not just the Fed decision—it’s the dot plot and Chair Warsh’s guidance. A hike plus signals of another move in December could strengthen the dollar and pressure gold, silver and equity valuations.
Although we drifted down last week there is no clear trend because we were down on Tuesday, up on Wednesday, down on Thursday and up on Friday… so most days we are spending a lot of time inside of the previous day’s range.
For the last two weeks we are averaging moves of around $60 before we reverse.
so again for this week we have to keep things tight, taking quick profits whenever we see them
Through September so far, we have held a range of only $228 or 5%, from 4282 up to 4510.
We are still trading exactly where we were 5 or 6 weeks ago, so there is no trend or pattern to guide us at this stage.
It seems everybody’s talking about a head and shoulders pattern in gold and I don’t see it as relevant.
A head and shoulders pattern is only relevant after a sustained bull run and we certainly haven’t seen that.
If retail traders are short expecting the head and shoulders pattern to complete, it could create a short squeeze and push gold higher.
This is not the basis for any trades but something I just wanted to note.
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