Gold markets have continued to be very soft in general, as the market continues to pay close attention to the US dollar and interest rates in America. After all, they are like kryptonite for the gold market, and of course, is something that you have to pay close attention to. Now that we have the Federal Reserve this week coming out with an interest rate hike, people will have already started to price that in. Because of this, it’s likely that we will continue to see gold struggle overall, given enough time.
The next couple of days will be very crucial for the gold market
- If we do break down to a fresh, new low, then it’s likely that the gold market will go down to the $1500 level.
- The $1500 level of course is a large, round, psychologically significant figure, and therefore a lot of noise would be expected in that area.
- I think we have a situation where that would be a huge fight, but if we do break down below there, then it’s likely that the market could go down to the $1250 level.
If we do rally from here, that 50-Day EMA will be difficult to get above. The $1700 level is an area that is interesting due to the fact that it had offered resistance previously, so it of course will have a lot of interest paid to it. If we do break above there, then things could change quite a bit, but ultimately this is a market that I think will be negative for a while, but the next couple of days could be choppier than anything else. The choppiness will be in reaction to people waiting around to figure out what the Federal Reserve is going to do next. The Federal Reserve is more likely than not going to be hawkish yet again, and we already know that the interest rates are coming. It’s going to be about the way the Federal Reserve phrases things, and how the statement sounds. Because of this, I would anticipate that rallies will continue to get sold into unless, of course, the Jerome Powell statement and press conference would change everything in general. I don’t see that happening, as we still have plenty of concerns out there about inflation, so therefore central banks will continue going forward.
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