Gold Is Just Biding Its Time

May 14, 2021 09:45 AM
Gold Market Update

Gold Market Update

Gold is in another holding pattern, trading sideways and marking time until the next breakout to the upside. Gold has been holding above $1,810 and it’s also been capped by resistance at $1,850. Gold will break out above $1,850 when the U.S. Dollar drops below .9000. It’s coming! 

In the meantime, there’s a defined and tradeable range. Trying to stay long a deferred contract month while scalping the front month would be one way to approach this market.

ETF inflows have been positive. The Dollar has been trending lower. Inflation, real inflation that you and I see everyday, is here. The government’s measured form of inflation is also becoming undeniable. That’s why they, the Fed speakers, are calling it transitory inflation. 

They want us to believe there's a “goldilocks” scenario: not too hot, not too cold. They say they’ll spark inflation, fan the flames, and pour gasoline on the fire, but still be able to keep that fire under control. I don’t buy it. We’re going to continue to throw money at the economy when we already have an all time high of cash sitting and waiting for the economy to fully open. 

Stay long gold. The low is in!

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

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About the Author

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