Gold Reacts Positively Despite Improved Fed Outlook | The Gold Forecast

Gold Reacts Positively Despite Improved Fed Outlook

July 27, 2016 - 5:14pm

 by Gary Wagner

Gary S. Wagner - Executive Producer

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Gold Forecast: Proper Action

This morning, just following the conclusion of the FOMC meeting, we issued a buy signal in gold. Traders taking that call initiated longs at 1332.

Maintain current long at 1332

Maintain current stop below 1305.

 

Gold Market Forecast

Over the last week of trading we had noted the fact that although gold prices were not moving substantially to the upside, a base or bottom was forming right around 1315 per ounce.

On yesterday's report we spoke about the fact that it now seemed likely that a bottom was in place but we still required technical evidence that a key pivot point or "V" was evident in the market. The criteria that would confirm that assumption would be gold prices breaking above 1330.

Following this month's FOMC meeting's conclusion, in which the Fed stated that interest rates would remain the same, we saw gold drift slightly lower for a few minutes, and then begin to move into rally mode. As soon as we saw the market price of gold break above 1330 it was evident that we had now seen gold prices meet the criteria for a key reversal and we initiated our long position.

On today's video report we will detail the thought process behind this most recent trade as well as the logic behind our current stop. More importantly we will also define our upside target or exit strategy should the market continue to move in an upward direction.

Trending Markets Forecast

We saw a very interesting reaction to today's announcement by the Federal Feserve that interest rates would remain steady.

US equities, specifically the Dow Jones industrial average, had been trading slightly lower for the better part of the morning. Once Fed minutes were released we saw moderate and tepid moves to the upside that could not be sustained. The Dow Jones industrial average in essence closed unchanged, the Standard & Poor's 500 moved slightly lower and the NASDAQ higher on the day.

Crude oil has effectively hit our initial target that we have been looking for of $42 per barrel. On today's video report we will detail our current model and interim forecast in crude oil.

Sentiment Indicator: