Gold Trades Lower, the Dollar Moves Higher, and the Trade War Deepens

May 28, 2019 - 5:42pm

 by Gary Wagner

Gary S. Wagner - Executive Producer

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Gold Forecast: Proper Action

We are currently flat with no active trades. That being said the current fundamentals behind the trade war seem to be getting farther away from a resolution than closer. As such is not a matter of if, but when this dispute escalates into the economic fabric of both the United States and China. On today's video report we will detail the parameters we are looking for to enter the market for him the long side. We also will touch upon what would negate that call and Turner market sentiment bearish.

Gold Market Forecast

Today was a day of truly mixed messages as the US equities traded higher on the open, and gold traded modestly lower. As market participants began to acknowledge the potential for recent actions by the administration as well as China's rhetoric has created a deeper chasm and a wider bridge to cross if the two superpowers are to in any way resolve their issues and and this trade war. Today's video will touch upon that topic and how it could change the economic conditions both in United States and China.

Sentiment Indicator:
Gold -> Bullish
Silver -> Bearish
S&P 500 -> Bearish
Bitcoin -> Neutral
Bitcoin fundamentals by Joseph M. Wagner II:

What Bitcoin Futures Most Recent Gap is Telling us

As we talked about Friday, we were expecting a gap in Bitcoin Futures (BTC #F) over the weekend. But we were not expecting was for this gap to be an “exhaustion gap”. According to Investopedia, “An exhaustion gap is a gap that occurs after a rapid rise in a stock's price begins to tail off. An exhaustion gap reflects slowing momentum usually from falling demand for a stock.”

There are three main reasons why this most recent gap appears to be the beginning of a correction. The first reason is the today’s candlestick which is shown as a doji with a small body and long upper wick. This type of candlestick is often associated with a key reversal and change in market sentiment. The second reason is the size and price difference of this gap, it shows slowing momentum simply because it is a smaller gap then the previous one which occurred on May 13th on a daily chart as well as May 19th on a thirty Minute chart of BTC futures on the CME .The third and most vital reason that this current gap appears to be an exhaustive one is trading volume. The May 13th gap exhibited a huge spike in trading volume immediately following the gap up. However, that spike in trading volume was not witnessed today (In the CME) although volume is still above 10,000 contracts on the day, which is still elevated on a historical basis.

Although Todays gap up looks less bullish than both gaps from the last two Monday’s I believe this is not likely indicating a key reversal and more likely is pointing to a correction in the market. If such a correction should occur support levels lie at $8500 and below that at $7400, resistance still stands at approximately $9800.