GCM4- Gold is back above 1300 early this morning after reversing in a violent fashion during yesterday’s session. Gold traded to a low of 1268.4 early in yesterday’s session, the lowest level since February 10th and making sure to clear stops by taking out recent lows by nearly $10. As yesterday was May option expiration we should not be surprised to see some irrational price action. Once the market got back above resistance at 1281.8-1284.4 longs who got squeezed out chased the tape to get back in causing the metal to reach yesterday’s high of 1299 early in the session. Gold has reached a high of 1303.1 early in today’s session stretching just above the 200 day moving average which comes in at 1302. A close above the 200 day moving average will give the bulls a chance to take control ahead of next week’s FOMC meeting. Look for first support to come in at 1290.4-1293.5 on the session. The 100 day moving average comes in at 1280.5 and this will act as a major line in the sand support on pull backs; only a close back below here will signal a failure and continuation of the bear leg. Traders must watch the equity market as weakness, whether it may be geopolitical concern, earnings or purely an overbought market has caused a flight to safety in Gold.
Resistance- 1302***, 1304.8-1307.6*, 1312.3-1314**
Support- 1290.4-1293.5**, 1287.6*, 1284.4*, 1280.5***, 1262.6***, 1237.5**, 1220-1223.6**, 1211***
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