- Gold has fallen pretty significantly during the course of the trading session on Tuesday as we are now flirting with the $2,600 support level.
- This is an area that a lot of people will be paying close attention to, not only due to the fact that previously it has been important, but there are a lot of options barriers in this general vicinity.
It's also worth noting that the 38.2% Fibonacci retracement level is there from the recent swing higher, so it'll be interesting to see how this plays out. I do think that in the longer term, you probably have a real shot at gold going much higher, but with the CPI numbers coming out on Wednesday, it might be a scenario where people are waiting to see how that plays out.
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After all, CPI could shock the market and, in that environment, you could see inexplicable volatile moves and then see the market turn right back around. So, with all of that being said, I think you have to look at the longer term trend, assume that it still continues and look for opportunities. This is a potential opportunity if we turn around and show signs of life.
If We Were to Break Down
If not, that's fine. We just started to look towards the $2,530 level, which is your next major previous area of market memory just waiting to be tagged. That being said, this is a market that has fallen apart pretty hard and probably far too quickly. The geopolitics will be different due to the fact that the United States is more likely than I'm going to enter a less confrontational stance with other countries around the world with a Trump administration. So, with that being said, this is a market that I think given enough time will eventually find a reason to go higher, but it won't be geopolitical. It'll probably be interest rates dropping, the central banks around the world buying gold, and then of course the profligate spending by most major economies.
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