Gold's Big Day: Market Shake-Up

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Let's take a look at the first day of trading of the week, as we see that the price of gold has made the biggest one-day drop in over a year as geopolitical concerns eased. Now that we have taken the war premium out of the market, prices will focus on the current economic situation, such as interest rates and inflation.

With Iran backing away from any further conflict or confrontation, it has successfully established itself, against the consensus, as a very major nuclear presence in the region capable of penetrating the globally implemented missile security system considered impenetrable. The uncertainty in the Middle East has put a major premium on the price of gold, which would set a floor of support for new buyers.

When we take a look at the price of gold (XAUUSD:CUR) since we published our 360-day cycle analysis back on September 28, 2023, we can clearly appreciate that the market has met all expectations and targets. The low on October 6, 2023, was 1823.5. The recent high made on April 12, 2024, was 2448.8. The completion of this 360-day cycle came during the first 6 months, coinciding with the 180-day cycle. If we were to see a correction, it would come at this time and price.

On April 22, 2024, the gold market opened at 2397, making a high of 2404 only to collapse to a low of 2338, making this the biggest one-day drop in the price of gold in over a year.

The metals markets are running two narratives:

1. Geopolitics

Marios Hadjikyriacos, the senior investment analyst at XM, told clients that judging by "measured counterattacks, clearly neither Israel nor Iran was interested in an actual war."

"Fighting will be constrained between Israel fighting proxy fighters and not Iran directly," for example, he said.

This will eliminate the speculation that drove the market to new highs and bring the market back to its mean or fair value, considering the current fundamentals.

2. Inflation

Inflation concerns mean potentially higher interest rates can present headwinds for gold as an investment, but it is a safe asset against currency devaluation and will preserve your purchasing power.

Let's take a look at the weekly standard deviation report we publish weekly and see if we can identify some short-term trading opportunities in gold.

GOLD: Weekly Standard Deviation Report

Apr. 20, 2024, 2:36 PM ET


  • Bullish trend momentum is indicated by the closing price above the 9-day SMA.
  • Confirmation of bullish price momentum with the market closing above the VC Weekly Price Momentum Indicator.
  • Specific guidance for managing trades based on price levels, including potential areas of support/resistance and profit-taking targets.


weekly gold (TOS)



More By This Author:

Silver Is The Metal To Watch
Gold: All Quiet Before The Storm
Gold: Load Up The Truck

Disclosure: I/we have a beneficial long position in the shares of GDX either through stock ownership, options, or other derivatives.

Disclaimer: The information in the Market Commentaries was ...

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