Everyone wants to know if the rally is over in gold and what to expect next. Although nothing is ever 100% when it comes to trading and investing, based on the footprints being left in gold the answer is no. In fact, the recent action in gold has been expected and should lead to the next leg of the rally.
Although gold has had a rough couple of days, it has managed to hold the 1380 support level. As we have written the past few days, gold is in consolidation and as long as support holds, there is no reason to believe that the next leg won’t be higher. Consolidation is the toughest pattern for traders to deal with because it is the greatest time of uncertainty.
There could be some big movement over the next couple of days with Chair Powell on the hill giving his two-day testimony on the state of the banking system. His testimony will be published before he starts but the street will be listening to the questioning. The interpretation of his words can create some big movement in markets including gold.