Gold breaks last week's highs and threatens $1800

Gold continues to shine

Gold has now nearly recovered from the two-day rout earlier this month. It’s up $18 today to $1799 with most of the gains coming in the past few minutes.

The market is increasingly confident that Powell won’t tip a taper at Jackson Hole on Friday, especially with the event going virtual due to a sharp rise in US covid cases.

The rally in gold is also part of a broader retracement lower in the US dollar and a bounce in commodities as the market begins to see a peak in this wave of covid. The larger question though is about the next variant and long-term drag from the virus.

For now though, the easy money will keep on flowing with some of it flowing into gold. Bitcoin is also having itself a wonderful run, up 3.3% today to $50,282.

Technically, gold has now cleared all the major hurdles before completing the full retracement to $1815. If it can get above $1830, the bulls would have some room to run.

As I wrote two weeks ago: there’s no one left to sell gold and everyone already hates it. That’s usually a sign that the bears are exhausted.

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