With the Federal Reserve set to release their collective policy statement tomorrow afternoon, the market has found a way to build drama around the “event.” Wait, that never happens!  But amidst all the back and forth between equity bulls and bears, many investors are missing out on the price action in Gold. And notably, the recovery to Gold 1275.
In January, I highlighted Gold 1275 as a key to a coming rally. After breaking 1275, Gold made another run at 1400. But that rally failed, setting up a 2 week drop in Gold prices to just below 1280. But Gold would settle in above 1275, and begin a coiling pattern that wouldn’t see the yellow metal close below Gold 1275 for 6 weeks. So what’s the big deal? Gold ended up breaking lower and piercing 1275 like butter, you say?
Well, 2 things:
1. Â Gold 1275. Â We’re back at that pesky level again!
2.  Gold Sentiment.  As recently noted by fellow SIM contributor Korey Bauer, Gold sentiment is pretty bad. And this has to do with a combination of low prices (see 2011 highs) and the rangebound price action that has built up hopes only to crush them moments later. But it’s also good to remember that poor sentiment can be a good contrarian indicator (i.e. bullish).
So as we head into the Fed meeting tomorrow, keep an eye on Gold. It will likely experience some price volatility over the net couple days, but the emergence above or below 1275 may tell the tale of the next move higher or lower.  Thanks for reading.
Thanks for reading.
No position in any of the mentioned securities at the time of publication. Â Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
