Well, the French had their elections and a centrist candidate who is considered to be pro-business came in first.
Emmanuel Macron is a former banker. So he's perceived by the market as “safe”. And although Marine Le Pen came in second, she is widely expected to lose to Macron.
Had the far left-wing candidate, Melenchon, made it into the runoff with Le Pen, it would have been bullish for gold.
But Macron's coming in first was no help at all.
When the markets opened Sunday night, gold gapped down on the four-hour chart and continued falling. 16 hours later, it finally stopped just below the 21-day EMA on the daily chart.
It's been stuck there pretty much ever since.
The truth is, gold has been acting somewhat erratic ever since it hit the 200-day SMA. So let's take a step back now and look at the weekly charts to see if we can understand better what is going on.
In November and December of last year, the price got far below the 10 and 21-week EMAs. So it should have been no surprise that it mean reverted back to $1207.75. But this produced an over-reaction in the other direction as the price got above the EMAs.
Once the price hit the 50-week SMA in February, it then bounced down and back up while staying in the general area of the EMAs themselves.
After the bounce, it consolidated until the EMAs caught up, at which point it broke through and went all the way up to the 2011 downtrend line.
However, it is now once again above the 10 and 21-week EMAs.
At this point, the 50-week EMA is acting as support and the 2011 downtrend line is acting as resistance.
Gold has come a long way. And I wouldn't be surprised to see a big pullback here. It seems to be stalling and really struggling to move up in a way that it wasn't prior to February.
The FED meeting is on Tuesday. But it is widely expected to do nothing. However, if the members make hawkish statements in the press release, this may convince traders to sell. If so, it will probably present a buying opportunity.
NFP is also on Friday. And like all NFPs, there's no telling what could happen. So it's best to exit your trades on Thursday if possible.
A fall to around $1260.79 is a chance to go long. But wait for a candlestick pattern on the four-hour charts before moving in. In this case, a stop can be placed at $1253.61 and a TP at $1282.33.
Alternatively, this area may be broken. If so, it may fall all the way to $1235.33. A long there can be placed with a TP at $1260.79 and a stop at $1226.89.