Gold Consolidates In New Trading Range

April 30, 2021 11:50 AM
Gold Update

Gold Update

Gold has a new trading range as it bases another new bottom and gradually grinds its way higher. At some level, gold will have an explosive-type breakout to the upside, and I think that level may well be $1,800. 

Gold had an impressive rally from $1,725 to $1,798.40. In my opinion, the rally was rooted in U.S. Dollar weakness. After 3 failed attempts to move the rally above $1,800, we’re now experiencing some simple back and fill action. So, the “new” trading range— for now— is $1,750 to $1,800. The next attempt to take out $1,800 should quickly take gold prices towards $1,850. 

U.S. Dollar bounces cause gold pull backs. The Dollar can’t sustain any type of meaningful rally while the printing press runs full speed without interruption. Monetary policy won’t change any time soon and gold will necessarily move higher as currencies around the globe are devalued.

Platinum struggles to breakout and to hold a close above $1,250. This, too, shall pass. Palladium has just made a new all-time high and should also help support platinum. Platinum is a good long-term value in the $1,200 range. I’d expect that when gold moves above $1,800, we’ll see platinum testing $1,300.

If you are interested in discussing the potential opportunities in the metals futures, contact me directly fcholly@rjofutures.com

About the Author

Frank Cholly has 35 years of commodity industry experience. He spent 20 years on the CBOT trading floor.