The one thing I have noticed recently during the 'Corona' period is that Silver tends to set the direction which Gold seems to follow.
So look at Silver's daily chart today (below):
Now lets look at Gold's daily chart below:
It will be interesting to see if Gold follows Silver's 'Green Bar' scenario later on today or not.
If the 'play' I have highlighted above does not materialise then it will confirm a bottom for now.
Markets can react differently to how the media portrays the situation. I accept there is likely to be more bad news which will be released in the coming days and weeks. The question is how much of this has already been priced into the markets?
The rest of the world are invested in US markets. If the US markets crash then it will have a severe domino effect across the globe. The US Government will do everything it can (hence throwing trillions of dollars at problems) to try and ensure the US markets do not crash. If the US Government succeeds then markets may continue going up after the Coronavirus situation has calmed down.
If the world loses confidence in this scenario then boy could there be a mammoth drop coming. This is the risk that we face. It is not clear one way or the other at the moment as the market moves one way and then another on a daily basis and even throughout the day. All eyes will be on economic data. Should the US experience a severe recession then this backdrop will be enough in my opinion to send markets crashing further.
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