Spot gold hits $1850 - what next?

Spot gold hits $1850 - what next?

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Jonathan Da Silva Tuesday January 03, 2023 09:32

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The last piece I wrote was Friday December 16, gold was trading at $1775 spot, and in that piece, we suggested the dip was to be bought; last night, spot gold hit $1849.99. If you have read my commentary with any regularity, you know that $1850 has been in sight for the past few months. What is next for gold? This trader expects some resistance at $1850 and a range to develop between $1820 and $1850, as a probability. Remember that there's nothing wrong with taking profit, but consider that bulls have momentum on their side. As the below daily chart shows, stochastic RSI could have higher to go, an extended move may take the price to $1880 quickly.

I also suggested that the dip in stocks was a chance for bulls to get in for a "Santa rally," but alas, Santa did not come. However, contrary to the giddy sentiment of raging bears applauding Santa's absence, the SPY continues to hold support at the level we suggested, despite it not acting as a springboard for an end-of-year rally. Below is an updated 4-hour chart on SPY. Bulls should be wary of a breach below the December 22 low. As of now, however, that level remains intact, so traders can decide if they want to stay on the long side or cut out prematurely.

Thanks and good luck in 2023!

By Jonathan Da Silva

Contributing to kitco.com