As the United States Congress looks very likely to see a bit of a continuing resolution being signed, it suggests that the United States government is not going to shut down. That being said, the market is likely to see a reason for interest rates to drop a bit, as the risk of default is rapidly disappearing. That being said, this is probably a bit of a major knee-jerk reaction that is overdone during the day. Rates should continue to climb, because quite frankly inflation is starting to get out of control in America.
As long as it is going to be cheap to hold paper in relation to storing gold, it makes sense that gold will continue to fall overall. As the US dollar strengthens late into the day, it is very likely that we will continue to see a lot of downward pressure given enough time. At this point if we were to reach towards the bottom of the candlestick for the trading session on Thursday, then the market will fall apart and go looking towards the $1680 level. That is an area that has been massive support more than once in the past, so I do think that it is only a matter of time before there would be a lot of support in that general vicinity.
If we were to break below the $1680 level, then it is likely that we could go looking towards the $1500 level. That is an area that is even more important than the $1680 level, and therefore I think a lot of support would show up there as well. I also believe that if we do break down towards that area, it will be a major spike in the US dollar which is a huge turnaround. On the other hand, if we turn around and take out the highs from the most recent swing to the upside, then it is likely that we could go looking towards the $1800 level. That would obviously be a “higher high”, which is something that this market desperately needs, despite the fact that it had been so explosive to the upside during the day on Thursday. I believe this knee-jerk reaction is about to get turned around yet again based upon the noise that we are starting to see creep back into the market at the end of the session.
