The gold market has seen consolidation over the last 2 months with a slight downward bias after its drop off at the end of February. The ranges are getting tighter and this can be interpreted as the calm before the storm.
The all important Nonfarm Payroll number to be released Friday morning is expected to give the market direction. Recent economic data has not been positive, and given the impressive run in the market all year there is a lot of room for the indices to drop off to the downside.
There is an increasing belief that gold is losing its designation as a safe haven due to some recent positive correlation to the overall market, but I disagree. The two assets are extremely different and I would expect them to move in opposite directions most of the time. If the market does retrace, and gold has maintained its reputation for being a safe haven, then look to play gold to the upside. A key area to watch is the 1700 level, as a break above that mark should set a higher trend.
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Eddie has a mixture of experience between the trading floor and electronic environments. He began his career as an options market maker for prestigious options firms Archelon Trading and The Hull Group, trading index and equity options in the pits on the CME, CBOE, and AMEX. He also traded for a hedge fund within Archelon and spent many years using various platforms as a proprietary derivatives trader..... Read More
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