Anthony Speciale Stock Market Analyst

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What’s Next for the Gold Futures Market?

Happy Friday, and welcome back to A Better Way to Wealth!

Today, we are going to look at the gold futures (GC) market. We’re going to take a peek at the big picture view and then dial it in a bit.

As we go through this, feel free to pull up the chart and follow along to see how right we are in our analysis.

(Click here to view my GC chart analysis on TradingView.)

I’m always going to give you both sides, meaning what’s going to happen if the market goes up and what’s going to happen if the market goes down. It can do either, or it can do nothing at all.

Price can sit stagnant for long periods of time. I’ve experienced that, and it’s something that’s challenging as a trader to recognize when it’s time to not be in the market.

Sometimes, the short or long opportunity just doesn’t exist in a particular market, and you sit on the sidelines.

You’ll learn over time that my absolute favorite position is cash because it doesn’t disappear on me, and while it limits my upside, if I get in on a conservative basis and I can make calculated trades, I’ll be happy. I’ve only got to take a handful of trades per year to do really well.

Analyzing the Gold Market

Let’s circle back to the gold market and take a look at it. Now, in last week’s Rapid Wealth Alliance session, I started it off a bit differently than in the past.

What I did is I started off on the broader markets. And to me the broader market is the major indices. We all know they’re heavily weighted averages, but I started with the Dow, the Nasdaq, the S&P, the Russell, but then looked at Bitcoin, Ethereum and then I looked at oil and gold.

The reason I point this out is that last week, when we were having our session, it was Jan. 25. I had said to traders that may have been long gold that there is some notable resistance approaching.

Now, had they taken that warning, great! If not, there’s no harm in that as well. But I had told them that we’re probably looking at resistance at 1,855 on the gold futures market.

So, whether you were long GLD, or playing the futures contracts themselves, I told them I would look out at 1,855. There is a bit more resistance at 1,862, and then you have a long shot up here to 1,900.

So, if we can break above 1,855-1,862, and we can get some follow-through, then 1,900 was certainly in reach. But if 1,855 or 1,862 were to hold then the market could potentially roll over.

Resistance in Action

Now, if any of you were in this class, you may have thought something or nothing of it. But the point was that the high of that particular day came to 1,854.20. Was I a little short of 1,855? Yes. There’s always a bit of wiggle room.

But what happened once it tested that bit of resistance? It just dropped like a bag of rocks! It dropped so hard that it broke, on the following day, through the daily structure back into the weekly structure and then it broke and closed below that.

Where does that leave us for gold this week? After all, we realized last week that we hit a particular point in the market and that particular point had created a reaction. For every action, there’s a reaction.

Well, the ascending channel line is now acting as newly appointed resistance. When price closes below a support line, that support line becomes resistance. When price closes above resistance and stays above it, that line now becomes support.

As of this writing, we are testing this area, which is now known as resistance. So, one of three things is going to happen from here.

The newly appointed resistance area could hold, and price could fall. If it does, we could go to the mid-1,700 handle. The line is ascending, so as the days go on, it continues to increase.

As the line rises, we could be as high as 1,760-1,765 by the weekend. We could find some support there if price does continue to come down.

If price begins to stabilize, which can happen, meaning the price could just start moving in a push and pull motion sideways and consolidate, we could see the price start to form something that looks like a bunch of chatter sideways.

That’s a possibility, and if that chatter occurs, we’ll see it go in this direction, stay right around the 1,800 mark for a period of time and eventually break either up or down.

The idea is to know that when it breaks up or down, we are on the right side of it. We want to be able to limit our risk if we have open positions or put on new positions if we believe that the market is going cooperate in the manner in which we believe it will.

If price begins to not only break above but, most importantly, close above the ascending channel line, we will have some newly appointed resistance. If we can then get price to rally above the next resistance line, we would be looking to retest where price fell from last week.

Up, Down or Sideways

Last week’s price was at 1,855-1,856. This week’s is going to be a bit higher at about 1,859. The price is going to do something, and prices do basically three things.

They go up, down or sideways, and it’s our job as traders to identify that as quickly and efficiently as possible and then take that information and put it into a profitable move.

Again, last week, we saw a test that just came a bit short of what we expected it would and it fell right over. Right now, as of this writing, we are testing resistance at about 1,798.

For me, I want to see a close and some conviction of the price following through. If it does, we can hopefully get to the upside. If it does not, this could be an impulse, a correction to the downside and then another impulse lower. So, we’re going to look to see how this transpires.

With that said, I hope everyone had a great week. I’m always excited to spend the weekends with my loved ones, but I’m also excited to get past the weekend so I can get back to being here in the markets with you.

I hope today I shared something with you that inspired you and that you learned something new. I look forward to talking with you again next week! Have a beautiful and blessed weekend!