With gold unable to find direction, I suspect that a rising dollar and lack of geopolitical headlines are containing the price. The safe-haven trade is currently on pause unless we see a punch through $1568.8 and then a spark up to $1600 is likely. What is interesting is the divergence between declining interest rates and gold futures. Usually, we see these two markets track each other unless the market is pricing in a deflationary environment, and this could be the case with news of the coronavirus spreading. Now, something to keep an eye on is if the S&P breaks below 3300, calls for a top in the market might drive investors back into gold.
With support and resistance in a $32 range from $1568.8 on the upside and $1536.4 on the downside, I am expecting an explosive move once a key level is broken. Stochastics and MACD are in the middle of the range giving no clear sign of direction. The ADX is weakening and this tells us that the sideways direction will be short-lived so plan your trade and trade your plan.
Good luck and good trading,
Chief Market Strategist
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