Gold has pulled back slightly, but still up almost 15 percent since 2016. Traders don't believe the current rally as they look hopeful of more central bank quantitative easing, which is exactly why gold has had its run this year; and it is why I have been saying fundamentals have been strengthening for gold for roughly 16 months.
After gold volatility hit multi-year highs, it is beginning to moderate a bit. I expect it to remain elevated:
Technically, gold downside may remain limited with minor trend and price support at $1,205 and dynamic support at the 72-4H EMA nearing $1,198. Deeper support levels are seen at $1,190 and $1,177.
Volume has tapered off since the Feb. 11 high, but positive bars still remain on top. Near-term resistance can be seen at $1,214, while stronger resistance is $1,220. If gold can retake these levels, price action would challenge the recent downtrend from the recent high. At that point, bulls can look toward $1,240.
What has been beneficial is that gold has been able to work off its highly overbought level while still remaining about key support.
Not only is it ironic that the Federal Reserve's first rate high in seven years was in a corporate profits recession and sub-one percent growth, but it also could have been done going into a recession.
Way to go, Janet!
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