Gold up $3.50 to $1344
Gold continues to break out from the consolidation pattern that kicked off the month. It's up $3.50 to $1344 after hitting a fresh 10-month high of $1364 in Asian trading.
The measured target of the two week back-and-forth is just above $1350. That also highlights the 2018 highs near $1365.
I believe we've entered the final stages of the gold rally, at least in the short term. It's rallied more than 12% in a fairly short timeframe and the good news from the Fed is already in. There could be another leg higher on a flare up in trade but there isn't currently a catalyst to break $1365 and the technicals are tough.
From a risk-reward perspective, I see a good argument to move to the sidelines now or above $1350. When you see headlines like this, it's oftentimes a top:
The hope in the story is that hedge funds begin to pile into gold and spark a second leg. That's certainly possible but I don't see the story in gold being compelling enough to drive it. Seasonally, the tailwind ends in March so that's another thing to consider.
All that said, if it can get above $1365 -- especially after a larger correction -- then there is plenty of room on the upside.
