Gold struggles to shine ahead of central bank decisions
James Chen, CMT September 20, 2016 6:05 PM
Against this backdrop, the price of gold has dropped to a key support level at a major rising trend line that extends back from the $1050-area multi-year lows of late last year. This trend line has been tested and respected on several occasions, providing strength to gold’s uptrend of the past nine months. As of Tuesday, price has tentatively turned back to the upside from this trend line support after a week and a half of falling sharply.
Could Wednesday’s central bank decisions serve as catalysts for a rebound off support for gold and a continuation of the entrenched uptrend? Most importantly, this would likely be contingent upon the Fed refraining from raising rates as well as taking on a more dovish-than-expected tone, which, in turn, should place some immediate pressure on the US dollar. If this occurs, there could likely be a gold rebound off trend line support, with the next major upside targets at the $1350 and $1375 resistance areas. In the event of more hawkish-than-expected talk from the Fed, however, a gold breakdown below the support trend line could occur, in which case the next major support area to the downside is around the $1250 level.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.