Gold Spikes on Conflict

Gold markets were very volatile during the trading session on Thursday as Russia attacked Ukraine. That being said, the market continues to be very noisy, and it does make a certain amount of sense that we ran into exhaustion. However, the giveback in the gold rally was a bit scary. One would think that a lot of stops have just been blown through, but I am the first to tell you that this candlestick does not look good at all. In fact, I would be a bit worried if I was a holder of gold at this point.

For what it is worth, I told several clients today to get out at roughly $1950. This was mainly due to the fact that it had just rallied far too quickly and too violently. When you start to give back big chunks like $25 at a time, it tells you something is broken. This does not mean the gold cannot go higher, and quite frankly I think it will eventually. However, we may have just had the “blow off top” that the market desperately needed. If that is going to be the case, you can expect a relatively large pullback.

Gold Price Predictions Video 25.02.22

This should end up being a nice buying opportunity eventually, but I suspect that far too many retail traders chased this market and now may find that they have done irreparable damage to their accounts. More likely than not, there are a lot of people out there hanging on for dear life and praying the gold turns around.

When you see a candlestick like this, and typically means follow-through. That does not have to mean follow-through, and it is just a probability. At this point, I like the idea of buying dips in order to pick up a bit of value, especially if we can get somewhere closer to the $1880 level.

For a look at all of today’s economic events, check out our economic calendar.