Gold gapped higher on geopolitical tensions but quickly sold off as initial panic faded.
Gold
The gold market gapped higher to kick off the trading session here on Monday, which is not a huge surprise when you look at the state of the world with the United States and Israel attacking Iran. And this is a market that I think is going to be very noisy and will of course move on to latest headlines.
It appears though that the initial panic that was seen in Asia is starting to abate. And it's worth noting that once the actual full futures market opened up, it's been pretty much straight down. We have filled a gap from the open. We'll see whether or not that remains the case. I do think ultimately, Gold probably goes higher for a whole host of reasons. It's not just the Iranian situation, but it also looks like we are running out of steam. Buying a pullback makes quite a bit of sense here. I know a lot of people have been messaging me today asking what's going on, why isn't gold at 6,000 an ounce? And the reality is, as harsh as it sounds, not a lot has changed for most of the world. Now that could change at any moment.
Key Resistance Near $5,500
But in this environment, I think you have to pay attention to the fact that we did fail at the top of that horrific candlestick from January 30th. So, it'll be interesting to see whether or not that ends up holding as resistance near the $5,500 level and what it takes to break above there. Once we do, that's an extraordinarily bullish sign.
As things stand right now, somewhere around $5,200, I'll be looking for a reaction if we pull back there, and I believe $5,000 is your current floor in the market.