Originally published by AxiTrader
Gold broke down and through trendline support from the December 2016 low last week as the warnings from the Fed drove the US dollar and interest rates higher.
But as bond rates rallied and the US dollar sold off gold found support on Friday night after retesting toward the important $1219/23 support zone.
It's opened up the week in stronger shape around $1235 after trading to a low of around $1222 on Friday night.
That level was important because it was both just above the recent breakout level of $1219/20, which was previously both resistance and then support. But it was also the 50% retracement level of the latest leg of gold's upmove.
It's a very technical market at the moment with traders clearly watching important levels. That's allowing gold to resist the overall push of the fed, US dollar, and interest rates.
But gold's resilience and the muted - even benign - move of these three markets suggests something is up in markets right now.
Quite frankly I don't know why traders didn't react more aggressively - besides in repricing Fed Funds expectations and short bonds - to the Fed's aggressive repositioning of market expectations last week.
But gold could be the canary in the coal mine for a broader market reaction when the Fed tightens on March 15.
Have a great day's trading.