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Waiting for the Fed
Gold touched $798.30 on Monday but closed at $792.60, practically unchanged from its gap-up opening price. The resulting doji candlestick signified indecision in the marketplace, or a balance of strength between buyers and sellers that is often a prelude to a change of trend. Gold then fell $4.80 on Tuesday after recovering $5.60 from its low of the day. RSI remains above 70, and MACD is still rising above its rising 9-day MA, so we may need to wait for the response to the U.S. Federal Reserve's decision on interest rates Wednesday for a clear indication of future direction.
On the weekly chart, RSI is overbought but has room to go higher. MACD, however, is looking somewhat extended above its 9-week MA. A consolidation near the round-number resistance of $800 is likely before gold resumes its climb.
GDX is in danger of having put in a double top on Monday, its close of $49.84 being just 10 cents above the intraday high of $49.74 exactly two weeks before. On Tuesday GDX closed at $48.82, down just over a dollar. RSI has been repelled at 70%, and MACD lies just above its 9-day MA. Unless GDX closes above $50 soon, it may form a trading range between its recent highs and support at $46.
The U.S. dollar index has fallen six days in a row, the longest such run since early September. A small bounce could begin within a day or two, in line with a possible consolidation in gold.
Gold touched $798.30 on Monday but closed at $792.60, practically unchanged from its gap-up opening price. The resulting doji candlestick signified indecision in the marketplace, or a balance of strength between buyers and sellers that is often a prelude to a change of trend. Gold then fell $4.80 on Tuesday after recovering $5.60 from its low of the day. RSI remains above 70, and MACD is still rising above its rising 9-day MA, so we may need to wait for the response to the U.S. Federal Reserve's decision on interest rates Wednesday for a clear indication of future direction.
On the weekly chart, RSI is overbought but has room to go higher. MACD, however, is looking somewhat extended above its 9-week MA. A consolidation near the round-number resistance of $800 is likely before gold resumes its climb.
GDX is in danger of having put in a double top on Monday, its close of $49.84 being just 10 cents above the intraday high of $49.74 exactly two weeks before. On Tuesday GDX closed at $48.82, down just over a dollar. RSI has been repelled at 70%, and MACD lies just above its 9-day MA. Unless GDX closes above $50 soon, it may form a trading range between its recent highs and support at $46.
The U.S. dollar index has fallen six days in a row, the longest such run since early September. A small bounce could begin within a day or two, in line with a possible consolidation in gold.
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