Gold will likely close at the highest level in a month today after a $17 gain. In the 8 trading days since the low on Oct 15, gold has gained nearly 8%.
A key zone on my chart is from the Sept 30 high of $1354 to the 61.8% retracement at $1364.
Gold daily
I expected the gold bounce to fade at that level as the US government stabilized but the taper trade has been more of drag on the US dollar than anticipated. So far, there are no signs it will let up, although that could quickly change with a hawkish comment from a key Fed member.
What makes me worry we could head further is the lack of hype in the gold market. Usually after an 8% rally the gold bugs would be screaming ‘buy’ from the hilltops. I’m not hearing that kind of buzz.
Gold weekly story count via Bloomberg
There isn’t a significant correlation between stories and gold prices but if gold can ratchet above $1364, I think the bulls will appear and the momentum will take it to the August high of $1433.
