After rocketing up $72 from the dismal NFP number, gold has trotted in place for the last two days forming an ii pattern (or a double inside bar pattern). Although we are at a key resistance area between $1622-1627, considering the weak bearish reaction at this level, we are anticipating an eventual breakout for further gains in the precious metal.
Considering the Chinese have been scooping up massive amounts of gold in the last quarter, along with possible monetary easing out of the BOJ, ECB and Fed, gold is our safe haven of choice. Thus, we will look to either buy on a breakout pullback setup above the key resistance area, or look for price action triggers on a pullback towards $1600 for an eventual break of $1627, attacking $1665 in the near-term.
Don’t forget the ECB has a rate decision tomorrow which should make EUR/USD movements interesting to say the least.
Global Market Commentary
Spain finally caved in today announcing they have been shut out of the credit markets causing German bond prices to fall further and putting more pressure on the euro. Basically Spanish yields became too much for the EZ’s 4th largest economy and they are now begging the EU to help capitalize their banks.
Personally, this trader does not think there is enough €’s to save Spain which could be over €300B to rescue them over the next year. Germany has become the lender of last resort but the pressure is mounting on them as their own economy and taxpayers are funding these bailouts. Again, if Spain goes, there will not be anything to contain the fallout.
Meanwhile the Dow closed marginally up by 26.5pts or .22% while the S&P gained 7pts or .57%
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Gold Forms Double Inside Bar Pattern. More Upside?
Published 06/06/2012, 04:41 AM
Updated 05/14/2017, 06:45 AM
Gold Forms Double Inside Bar Pattern. More Upside?
Gold
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