Ira Epstein Says Gold Appears to Be Consolidating After Rally
Key Takeaways
- •Gold is currently stalling at the 18-week moving average of closes after a powerful rally, entering what Ira Epstein describes as a consolidation phase.
- •Epstein does not believe the gold market has peaked and expects that prices will not revisit the recent low of 4098 in the near term.
- •Central bank purchases, geopolitical uncertainty, and expectations regarding Federal Reserve rate decisions have been the primary drivers supporting gold's recent advance.
- •Consolidation phases following strong upward moves are a typical technical pattern in commodity markets and can precede either a continuation of the trend or a deeper pullback.
Ira Epstein Says Gold Appears to Be Consolidating After Rally
Ira Epstein
In the weekly chart of gold, I told you that I thought the market would rally and then stall at the 18-week moving average of closes, which is where it is now. That is exactly what is happening in the current price action. The move is powerful, and there is a base here that will be very difficult to break.
I frankly think the market still has more ammo in it, but coming out of the gate it has already spent a lot of energy and probably needs to consolidate. That is all I can say at this point.
I am in no way suggesting that this market has peaked. I do not think you will be going back anytime soon to revisit the most recent low of 4098. So be aware of that.
Gold's recent rally has drawn support from a combination of sustained central-bank purchases, persistent geopolitical uncertainty, and market expectations around Federal Reserve rate decisions. Consolidation phases following strong advances are a common technical feature of commodity trends, often preceding either a resumption of the move or a deeper correction.
About the author
Ira Epstein
IraEpstein.com
LINN & Associates
Over the past 35 years, Ira Epstein has developed a reputation for providing clients with easy-to-use technology and teaching traditional trading know-how. A number of the firm's brokers have more than 30 years of trading experience. No matter how technology changes the methods of entering orders, there is no replacement for having "been there and done that before." It is the combination of services that brings everything together.
Whether it is education, market information or trading platforms, the firm provides solutions.
Ira began in the futures markets in 1969. Over the years, he worked his way up from the ground as a "floor runner" to becoming a floor trader. In the mid-1970s, Ira decided to make a career shift within the industry to develop both retail and commercial client bases. His customer base grew to the point that in 1984 he founded "Ira Epstein & Company," a trading firm specializing in retail, commercial and self-directed discount futures trading.
Along the way, Ira became a leader in trading technology out of necessity, due to increased small-lot trade volume. He was among the first to embrace the Internet, which has dramatically changed both the way information is delivered and how trading takes place today.
One of the ways Ira and his brokers showcase their work is through email market updates and Ira's "Futures Videos," which can be viewed on the website, through Market Center, Linn-IraChart Software and on YouTube.
IraEpstein.com
