Markets Grind Slightly Higher on Thursday

Looking at this chart, and looking at the history of Jerome Powell, I can almost guarantee that he will probably make things worse, not better. 

  • The gold spot market rallied a bit during the trading session on Thursday, to reach above the $1760 level. The market is likely to continue seeing a lot of noise.
  • Gold markets are waiting to see what happens on Friday morning, as Jerome Powell has a speech at the Jackson Hole Symposium.
  • Traders are trying to figure out whether the Federal Reserve is going to reiterate its hawkish attitude, or if it is going to have to pivot. After all, there is somewhat mixed economic news out there, but at the end of the day, inflation is still a big deal.

The 50-Day EMA sits above and is offering a significant amount of resistance, so I think a lot of traders will be paying attention to that technical indicator. Above there, we have the $1800 level, which is where we had pulled back from previously, with the 200-Day EMA sitting above there. All of that could cause a significant amount of resistance, so do not be surprised at all to see a huge fight if we try to rally.

Traders Waiting for Jerome Powell’s Speech

Underneath, the $1720 level has offered short-term support, and I think a lot of people will be looking at that number with great interest. If we were to break it down below it, it’s possible that we could go down to the $1680 level. Anything below there opens a significant amount of potential selling pressure, and it’s possible that we could drop all the way down to the $1500 level. It’s going to be difficult to trade this market in the short term, because you are going to have to pay close attention to the bond markets and interest rates, or perhaps more specifically put, pay attention to how traders interpret whatever it is Jerome Powell says.

Looking at this chart, and looking at the history of Jerome Powell, I can almost guarantee that he will probably make things worse, not better. Clarity is not exactly his forte, so I anticipate that we have sloppy trading ahead of us. However, I do think that the support area underneath should be rather significant, so it’s going to take a lot to send the market through that floor. Another real possibility is that we are simply going to grind in this overall consolidating pattern.

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