Gold markets rally during the week, making a fresh hi, but gave back the gains rather significantly. It ran into the top of the down trending channel, and that has the market rolling over rather significantly in order to form a green candle, but one that shows signs of weakness above. Overall, if we were to break above the downtrend in channel and perhaps even more importantly the $1500 level, then we can “buy-and-hold.” Looking at this chart, the $1450 level should continue to offer plenty of support, so therefore it’s going to take a significant amount of momentum to break through it.
Price of Gold Video 16.12.19
What I find particularly interesting is that we got the “phase 1 deal” signed on Friday, and gold wasn’t overly impressed one way or the other. In fact, it actually drifted a little bit higher during the day on Friday which is counterintuitive. That being said, it looks as if the gold market will continue to focus on the Federal Reserve and it’s lack of interest in cutting rates. That should continue to drive the value of gold lower in general, but if we do break above the $1500 level, that would probably lead more of a “buy-and-hold” type of trade, probably based upon some type of very negative financial headline. At this point, the market continues to see a lot of back and forth so it’s very likely that we will continue to see consolidation more than anything else in the gold market.
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This article was originally posted on FX Empire
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