The gold market continues to be very noisy at the moment, as we rally on peace talk hopes coming out of Iran again. However, the $4,000 level above continues to be a massive psychological barrier.
Gold
The gold market has rallied pretty significantly during the trading session, seeing the market go screaming toward the $4,000 level. The $4,000 level is an area where I would anticipate seeing a bit of resistance, as $4,000 is an area that previously had been support. Now that we have smashed through it, one would have to think that it's probably only a matter of time before market memory comes into play here.
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Furthermore, we have a lot of announcements this week that will have a major influence on how the U.S. dollar moves. We get JOLTS tomorrow, services PMI on Wednesday, and the jobs number on Friday. This is a busy week for the U.S. and could be a big mover of the gold market as well. We will have to watch rates in reaction to those numbers.
Looking to fade exhaustion in this market
I'm looking for signs of exhaustion to start shorting on short time frames. With all that being said, I suspect it is probably only a matter of time before traders start to sell the gold market again. But if we were to break above $4,100, then it's possible that we could continue to go to the upside. I am not holding my breath for this.
I'm looking for signs of exhaustion to start shorting on short timeframes and could ride this move all the way down to $3,600. We'll just have to wait and see how that plays out.
Ultimately, this is a market that I think will return to bullish behavior eventually. I just do not see it right now. Signs of exhaustion, I believe, end up being a nice entry point.
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