January 24, 2024 - (Gold Market Wire) - Gold is losing its footing, and the market we saw breaking down in our last missive, has now turned into a proper sell-off...with room to run, to the downside.

As it stands now, we are heading back to the $1980 level. The reasons for the weakness have little foundation in the market, per se, and it's wort noting that Gold's sell-off is being accompanied by a weak to stagnant US Dollar; so there is no fx angle. Wholesale liquidation into cash could be part of the reason, as many are expecting an equity market fall - but that's been the talk, off and on, for months now. Of course, Gold likes to anticipate, and if there is a big stock market sell-off, you can be sure Gold will be trashed with it, in the rush for liquidity.

The truth is, more likely, that Gold simply needs to pull back. Bulls should take heart in the fact that the sell-off, to date has been so tepid. There's no conviction behind it, but market players could try a push lower here to try and shake the tree for the weak length to be flushed. That is a distinct possibility, and so, we followed the discipline and took the hit to our trading length a good while back.

An outside idea might be that Trump's win in New Hampshire has calmed a psychologically fractured market, and given a drop of confidence back, where it was lacking before.

The sidelines are the only place to be. But big picture, the market remains bullish. This is a minor event. We must remember that we are ruminating about weakness and the market is above $2,000. That is something of luxury.

Perspective is called for.