We made an interesting observation on Friday - with the release of the Non Farms Payroll (NFP) number cancelled due to the Government shutdown in the US, gold sold off sharply then rallied at 1.30pm as if the NFP number had been released anyway!
It is clear that trading algorithms had been set to "play" the NFP volatility and went off regardless of the fact that no number was even released. This goes to show how dangerous it is to trade around significant news releases and that the trading immediately before and after the release can be disregarded entirely.
After the volatility surrounding the "phantom" NFP number, gold settled back into the pattern of the morning, drifting slowly lower. This pattern has continued overnight and into this morning, with gold now trading at 1311, some $16 off Friday's high and near to support at 1305-1308.
Further support can be found at 1300, 1292, 1277 and 1272, with a break of 1272 suggesting a strong likelihood of a move back to 1180 in the short term.
Resistance can be found at 1316, 1322-1325, 1338-1340, 1353, 1375, 1400 and 1434. A move above 1434 would suggest a return to 1500 in the short term.
Equities and oil remain under pressure due to the shutdown, with the dollar also weak and struggling to reclaim the 80 level. This is the ideal environment for gold to rally, the fact that gold remains unloved and in an established down trend is worrying for the bulls.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our current trade.
It is clear that trading algorithms had been set to "play" the NFP volatility and went off regardless of the fact that no number was even released. This goes to show how dangerous it is to trade around significant news releases and that the trading immediately before and after the release can be disregarded entirely.
After the volatility surrounding the "phantom" NFP number, gold settled back into the pattern of the morning, drifting slowly lower. This pattern has continued overnight and into this morning, with gold now trading at 1311, some $16 off Friday's high and near to support at 1305-1308.
Further support can be found at 1300, 1292, 1277 and 1272, with a break of 1272 suggesting a strong likelihood of a move back to 1180 in the short term.
Resistance can be found at 1316, 1322-1325, 1338-1340, 1353, 1375, 1400 and 1434. A move above 1434 would suggest a return to 1500 in the short term.
Equities and oil remain under pressure due to the shutdown, with the dollar also weak and struggling to reclaim the 80 level. This is the ideal environment for gold to rally, the fact that gold remains unloved and in an established down trend is worrying for the bulls.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our current trade.