While some of the heat has come out of the crude move through Asia today – perhaps a reflection of the disappointment expressed at the lack of new substance derived from the well-watched China NDRC press conference over positive geopolitical headlines, we’re also seeing US bond yields fall with better buyers kicking in after the recent sell-off.
Gold remains unperturbed by these forces, and while lower bond yields offer gold an upside tailwind, the fall in crude has been a central guide on geopolitical risk, so while the decline could well be derived from disappointment on the Chinese fiscal rollout, a decline in crude is still a decline.
With these conflicting gold catalysts remaining in place, it seems gold traders sit on their hands and wait for a clear steer before pushing price out of the consolidation we’ve seen since 25 September.
As the daily consolidation in price becomes more mature, the potential for a more explosive move through the defined range of $2685 or $2624 also increases.
These are the levels that define the recent range, and while we can make life more complicated by trying to rationalise exactly what the broad suite of gold players focus on to take inspiration for directional bets, the price action and the technical set-up aggregates all beliefs and behaviours. Subsequently, it pays to wait for the gold market to force a trade, where a powerful breakout, when it comes, of either level, should shape the trading bias – it will come, and when it does that trend could be well worth chasing.
