A Challenging Month For Gold

From a fundamental standpoint, there aren’t a whole lot of reasons to be divesting in gold. But, that is exactly what we have seen throughout September. Given concerns over global economic growth, and now a pending Trump impeachment, one is inclined to expect a bull market for bullion. Is October the month gold begins its treck toward $1600.0 and beyond?

Perhaps. However, for the month of September, December GOLD futures fell more than $40.00 per ounce in the wake of growing uncertainty. A dovish FED, Brexit, and questions surrounding American political stability should have helped values hold serve at the very least; they did not. At this point, a test of the 6-month month bullish trend appears to be a possibility by November 1.

December Gold Futures Extend Losses Beneath 1500.0

The 5000-pound elephant in the room for December gold futures has been the 1500.0 psychological barrier. This area has drawn heavy two-way action for a majority of the past month. Going into October, a significant deviation from 1500.0 is likely.

For October, there is one key level to circle and be aware of:

• Macro Support(1): 38% May/August Bull Run, 1458.8

Bottom Line: In the event the current bearish pressure on gold extends, a position trade from the 38% Macro Retracement will set up. Until elected, I will have buy orders queued up from 1469.9. With a large initial stop at 1439.9, this position trade yields 300 ticks on a return to 1500.0.

Right now, there are dozen fundamental reasons to be long gold. With a bit of luck, an opportunity to buy a sizable dip will present itself in the coming weeks.