The $930 price level for gold has held for the third straight day, with prices closing near the top of today’s trading range, which is a good positive spin on the market. The direction of gold still is strongly influenced by the dollar, which is in the midst of a consolidation pattern, appearing to be an ascending triangle. The dollar must break above 81.50 to shift the momentum bullishly.
Is inflation a driver? It does not appear so, and analysts that are suggesting if inflation is to become troublesome it will be further down the road, appear to be correct.The PPI and CPI data released over the past two days did not signal any warning flags. Thus, the main concern is the US dollar.While the BRIC countries may want to dump the US dollar like a hot brick, the reality is that even within those countries, more US dollar debt is bought than that of debt based in yuan, reals, or rubles. Do not expect the US dollar to collapse overnight.
Traders that want to be simply long of gold futures ought to wait for some short of washout low in the low $900 range as proof that buyers are stepping back into the market. If predictions about gold being priced at $1,500 or higher turn out to be true, then allowing the market to prove its strength is a wise decision.Take one’s cue from the US dollar and trade inversely of the direction the dollar breaks out of its current consolidation pattern.
Review charts on these markets here www.britefutures.com. Remember that futures and options can be used for bullish or bearish positions; feel free to contact me to discuss trading strategies. Each contract/option = 100 ounces, a $1 move in a futures contract = $100.
To open an account and receive trading recommendations on gold futures or options contracts (also stock indices, energies, currencies, etc.), or to use our online paper trading service BriteTrak,contact me attom@altavest.com. Visit www.altavest.com to request a FreeTrading Kit. Keep in mind that there is risk of loss in all trading.
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