So as you look at the market, you've got gold up $8 for the week, up a third of a percentage point, nothing is really going on. You don't have a trend, you have a lower low and a higher high on the swing line.
The miners? Well, as gold arrived at the $2400 area, I suggested a “pause with grace” was in order for the mining stocks, and that’s exactly what has transpired.
The gold market is staying underneath the 18-day average of closes. In order for the market to turn bullish at least I need to see a close over the 18-day average of $2348.60.
With everyone blaming rising interest rates for the S&P dropping 1300+ points off the early 2022 market high, the market has now seen an almost 1800-point rally off that low to make new all-time highs despite those higher interest rates.
Gold buying by central banks posted its strongest start to any year on record in 2024, helping drive overall demand for bullion higher in the first quarter.
Now you have a higher high and a lower low; gold ended that downtrend pattern. Now, the goal is, can the market get up to the 18-day average and what does it do there?
Gold continues to hold above $2,300. Further support can easily be seen, down to $2,240/$2,250. A breakdown under $2,200/$2,225 would be more problematic as we’d question the rally.
Any “pro” worth his or her salt ought hardly be “confounded” by anything the S&P does, certainly so when it declines from these ridiculously overvalued levels. A true “pro” ought to expect significant (understatement) downside risk.
Gold’s pullback maturing will be a great mid-upleg buying opportunity for gold miners, so traders should be watching fundamentally-superior smaller ones.
