Gold Hit By Bets That Great Britain Will Hang In With The EU.

June 23, 2016 - 4:53pm

 by Gary Wagner

Gary S. Wagner - Executive Producer

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Gold Forecast: Proper Action

We are currently flat with no active trades in gold or silver. After pulling profits earlier this week in gold, it was our current belief that we would see gold prices drift lower, which is exactly what we have seen unfold.

Based upon our current studies, we believe gold prices could trade as low as 1245 which is a 61% retracement of the move from 1200 to 1320. Although the Brits have voted on the referendum as to whether they want to leave the European Union, we are still a few hours away from knowing the results.

However, based upon a strong upside move in European equities, and follow-through to equities trading in the US, traders and investors have pretty much settled upon the assumption that the UK will remain part of the European Union.

Gold Market Forecast

It is absolutely more difficult to put a tremendous amount of weight upon technical studies during periods when markets are heavily fundamentally driven. Today is a classic case in point as investors and traders react to market sentiment. Soon enough, the outcome of the EU referendum in the UK today will be known 

If in fact the overwhelming assumption turns out to be correct, we would look for a continuation of the dynamic rally in both European equities as well as equities here in the United States. We would also look for gold to continue to trade under pressure, although we believe the majority of current sentiment has already been factored into prices.

One strategy we are considering is to put in a price order to buy gold at 1250 if touched.

Trending Markets Forecast

Beginning last night, traders and investors somehow saw through the smoke and acted upon the underlying assumption that Britain will remain in the European Union.

Thus we saw a tremendous upside surge in European equities, as well as European currencies as they traded against the US dollar. We would look for this current trend to continue.

Most noteworthy is the fact that should this rally continue there is a high probability that US equities will trade to a new record high.

Sentiment Indicator: