Gold Runs Up On More Brexit Ramifications and Dovish Fed | The Gold Forecast

Gold Runs Up On More Brexit Ramifications and Dovish Fed

July 1, 2016 - 5:14pm

 by Gary Wagner

Gary S. Wagner - Executive Producer

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Gold Forecast: Proper Action

This morning we sent out a special trade alert recommending the initiation of a long position in gold. Traders taking that call bought gold at 1338 (basis August Comex contract).

Maintain your current long gold at 1338.

Maintain your current stop below 1307.

Gold Market Forecast

Throughout the first part of this trading week we were trying to ascertain whether the most recent price action in gold could be viewed as simple consolidation or the onset of a small correction.

Either scenario would be quite feasible, considering the dramatic upside surge witnessed last week in the precious metals markets.

Specifically gold, which traded to an intraday high of 1360 and seemed to settle back at around 1320, showed technical indications that either of these two scenarios could be in play.

It was our personal opinion then, as it is now, that what we were experiencing was consolidation.

Furthermore, it was our belief that as the market consolidated it would once again return to its upside rally mode, taking gold to higher pricing.

That is exactly what we saw unfold today with gold trading dramatically higher up $23 on the day.

Trending Markets Forecast

A most interesting week in US equities. After the dramatic drop in excess of 600 points in the Dow Jones industrial average last week, Monday of this week provided more of the same, with more downside action in US equities.

Tuesday, however, traders began to bid up the equities markets as concerns about the Brexit referendum results seemed to slowly diminish. Over the next four trading days we would see US equities gain back almost all of the losses that occurred on Friday of last week and this Monday.

US equities triumphantly finished the week with the largest one-week gain seen in 2016. US equities are now trading near their most recent highs, with the Dow Jones industrial average closing just under 18,000 and the Standard & Poor's 500 within striking distance of its most recent yearly highs.

The real question therefore remains if equities will be able to overcome considerable resistance that has been evident at these price points and move to new highs on the year, or will they come close as they have in the past but not be able to move past the technical resistance found at these price points.

Sentiment Indicator: