Around 4amET, someone decided it was the perfect time to dump around half a billion dollars worth of notional gold into the futures markets.
The biggest single flush hit at 357amET with $228mm notional (around 1800 contracts) flushed to break below the 200DMA...
This ripped the precious metal's price back to yesterday's lows before it was quickly bid back up by yet more machines.
It has now recovered those mini-flash-crash losses.. and is back above the key 200-day moving average level.
Goldman technical anaysts suggest the nest leg higher for gold is to $1378...
Gold Daily – The setup here is looking a lot like USDJPY. It tested/held two equality targets from the April/June at 1,215-1,205. This implies that the pullback was in fact corrective/not impulsive. Daily oscillators have diverged positively from the bottom of their recent range. The break above 1,236 further confirms that the market is now rising in an impulsive (and has room to continue). The next level to focus on is 1,249 (1.618 off the July low/ 100-dma). As long as pullbacks avoid overlap with the Jul. 12th high at 1,226, the underlying bias should remain in favor of higher levels. It’s also worth considering the notion that Gold may be in the (C) leg of an (ABC) pattern which began in Dec. ’16. If that’s the correct interpretation, the next leg higher could eventually continue up towards 1,378. How price action develops at ~1,296 (double highs from April/June) will likely be critical.
View: Break of 1,236 opens an initial target at 1,249. Target/watch how price develops at 1,296.