Gold retraces
Gold has been one of the best trades for the past few months as it made a steady rise in a turbulent time.
It continues to benefit from a seasonal tailwind but it's run into resistance at $1300 and the heavy risk aversion of late-2018 has quickly turned into optimism in 2019. Still, that optimism is based on a Fed on hold and lower interest rates -- two things that are good for precious metals.
In the short-term, gold is in a healthy retracement and consolidation. The 10% rally since August left it in a modestly overbought position so a sideways move or retracement is nothing to get overly worried about.
At the same time, the retracement is an opportunity to measure the strength of the trend. So far, support at last week's lows of $1277 has held and that's the level to watch on today's chart. So far, the low is $1279. The bounce well-ahead of $1277 is a positive short-term sign but I don't see any scope for a rally today.
If $1277 breaks, there's support near $1265 and the $21 day moving average. That's a compelling spot for an entry. If not, it might be better to wait for a break of $1300.
