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Gold and Stocks changing relationship?

jeffriess
October 15, 2019
by Joseph Jeffriess, Market Analyst

The first sign was produced late into Friday’s session when stocks jumped after news regarding phase one of the trade deal hit the markets. Gold was sold heavily most of the day but pulled back $14.50 in losses by the end of the session. The US30 did trim 183 pts off its rally but still finished the session 221 points higher. Overnight we saw a decline in stocks and a rally in Gold. This continues the idea because the US30 just finished in the red after pulling back 123 points in losses. Gold failed to decline when stocks fought back holding a $5.73 rally. So far today Gold remains in the positive while the US30 also remains in the positive. No smoking gun just yet but price is hinting.

Whether or not price has truly decoupled should be shown to us by the market sooner rather than later. At the current point, Gold buyers look to becoming a little more independent.

Technically Gold remains entrenched in a downward channel with both sides setting up key short term levels. We see support at 1487.50 and resistance at 1512.60. Key support has also set up a new higher low inside the channel, but we require a new higher high to call it confirmed. Buyers, for now, look to be setting up a floor from that support point. A break of that level by sellers opens up a new impulse lower with 1472 a possible target.

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