After a 2-dayt $41.70 rally in December gold, the market still seems to be contained. The 200 DMA and 50 DMA converge right around $1,832 and that level seems to be keeping a lid on gold’s rally. Remember though, that a breakout above that $1,835 range would encourage the bulls to get more aggressive in adding new longs. First support comes in at $1,825 with stronger support at $1,810. A close under $1,800 would be a big negative. A close above $1,840 would be bullish.
The gold market seems to embrace the dovish Fed more than the prospects of runaway inflation, but the fact that gold has been unable to breakout above $1,835 has me scratching my head. I don’t get it, but the market isn’t always logical. I still remain bullish and believe that gold still has a big move higher coming. The market cannot go sideways forever!