Thoughts on Gold's Recent Bounce and 2050
Been watching XAUUSD pretty closely the last few days, and that bounce we saw after hitting the 1980 region was fairly strong, stronger than I might have initially anticipated. It's certainly put a different complexion on things short-term. The question now becomes whether this is just a relief rally in a broader downtrend or if it has the legs to retest significant prior highs.
The key level I'm focusing on now is around 2050. We saw some heavy resistance there previously, and it acted as a launchpad for the recent pullback. If we can get a sustained break above 2050 on decent volume, that would certainly change my bias significantly, suggesting we might be looking at a retest of the all-time highs. However, if we stall out around 2050 again, or worse, get a clear rejection, then the downside scenario targeting the 1950-1960 area, possibly even lower, remains very much in play. The risk, for me, is a quick reversal from this current momentum back down below 2020, which would invalidate the idea of this bounce having any real substance.
It's always amusing how gold can switch from 'dead money' to 'inflation hedge' faster than a politician changes their stance. I'm wondering if the strength is more about the dollar wobbling than XAUUSD having genuine conviction, or perhaps it's just the usual pre-Fed meeting jitters.