The theme of today is retracement as banking worries fade and traders square up ahead of the FOMC.
One of the big winners of the past two weeks is gold and it's a great example of the theme in markets today. It's down $40 to $1938 today after touching $2009 yesterday.
The $2000 level has served as something of a ceiling since the pandemic with three rips above $2000 sold at different times. Given the price and the history, it's no surprise that we're getting a solid retracement.
What's notable is where it's landed so far, right around the January highs and without completing a three-candle reversal. That could happen tomorrow but there's no doubt it will be driven by whatever the Fed decides to do.
In the big picture, gold is weighing the possibility of things like:
- More QE
- Further loss of faith in banks
- Lower rates stoking inflation later
- General uncertainty
Some might argue that the US debt ceiling is also a factor but I don't think that charade is a big issue, though it could be a one-or-two-day event in the coming days/weeks as it gets sorted out.