Gold consolidates
At the beginning of last week, gold sold off heavily, having traded at an all-time high just a few sessions earlier. It then marked the first day of October by rallying sharply, making back all of the previous day’s losses. Since then, it has meandered lower, pulling ever further back from its recent record. The daily losses have been modest, despite some decent intra-day trading ranges. Does this tell us anything useful? As far as the bulls are concerned, it suggests that the gold market remains resilient. All pullbacks have been shallow, and support around the $2,630 area has held, so far. There’s also the relief that gold hasn’t suffered one of its periodic, sharp and deep sell-offs designed to melt bullish resolve. On the flip side, there must be a concern that a protracted pullback is overdue. Also, buying pressure has been fairly muted. Could that be a signal that interest is fading, and that gold’s rally is coming to an end? It’s certainly possible, and silver isn’t helping as it dropped sharply again this morning. But history shows that when a real bull market takes hold in precious metals, then the accompanying volatility can be very scary indeed. We haven’t seen that yet. So, either there’s more of this bull market to come, or, precious metals are just swinging about and doing what they usually do. We’ll find out which it is soon enough.
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