China Trade Deal Optimism Sinks Gold, Sends Equity Futures Flying

CEO Technician
Posted Oct 13, 2019

S&P futures are up 27 points and gold futures are down $10 as I write these words. The culprit? China trade deal optimism as high level talks between the US and China continue for a 2nd day in Washington. CNBC even went as far as to analyze the amount of time Liu, Lighthizer and Mnuchin spent outside the building before entering, in order to give the cameras ample photo ops. Certainly that must be bullish, right?

Remember that we've been here before, there have been other Fridays in which the market was badly disappointed by the Chinese delegation leaving early with no deal. 

For whatever reason the market seems to think that this Friday is different. Perhaps it's because everything is crumbling around Trump and the salesman President would love to have something to cheer about, anything, even a shitty trade deal with a country he's chastised and mocked on his famous Twitter account. 

From a technical vantage point $1480 is an important support level for gold, with the October 1st low at $1465 representing last chance support before a much bigger correction would ensue for the yellow metal:

(Click on image to enlarge)

The recent stalling around the 50-day SMA and the Daily-RSI(14) median line is indicative of a market that is still within a digestion and base-building process. Gold needs some more time to set up the next leg higher, it's really as simple as that. This is normal and healthy bull market action, and this process could play out for another 3-4 weeks before we see that next uptrend begin to take hold.

###

CEO Technician
email: ceotechnician@gmail.com
website: tradinglab.co and EnergyandGold.com

Disclaimer: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The views expressed in this publication and on the EnergyandGold website do not necessarily reflect the views of Energy and Gold Publishing LTD, publisher of EnergyandGold.com. This publication is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.

321gold Ltd