Fed Minutes Released, Continuing an Ascending Triangle Pattern in Gold | The Gold Forecast

Fed Minutes Released, Continuing an Ascending Triangle Pattern in Gold

May 23, 2018 - 6:15pm

 by Gary Wagner

This morning’s release of the minutes from last month’s FOMC meeting provided some upside momentum to move gold off this morning’s lows. After trading to a high of $1,298 in overseas trading last night, traders bid prices lower in morning trading taking gold to $1,287 per ounce.

This low remained up until the release of the minutes which indicated a less aggressive Fed then had been factored into market sentiment. The minutes suggested that a June rate hike was highly probable. They also used verbiage (symmetric 2%) which indicated a higher degree of latitude in regard to their inflation target of 2%.

The minutes indicated that the Fed would stay the course in terms of rate hikes this year, as well as in 2019. The minutes also reported that the criteria for determining rate hikes remain unchanged.

“Members agreed that the timing and size of future adjustments to the target range for the federal funds rate would depend on their assessments of realized and expected economic conditions relative to the Committee's objectives of maximum employment and 2 percent inflation. They reiterated that this assessment would take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.”
 

Gold’s Ascending Triangle Pattern

This most recent bounce off the lows seen this week at 1,281 indicates that the most prevalent pattern in gold is still an ascending bottom and flat top, commonly called an ascending triangle. This pattern is a bullish continuation pattern identified in markets that are in an uptrend. It is created from a series of equal highs revealing strong resistance, in which corrections following each test of resistance are characterized by a higher low than the previous low.

On each higher low and retest of resistance, the market moves closer to the apex of the triangle. When the pattern completes, the price will break out above wedge by moving through resistance and trading to a new high. Following the break above resistance, that price point becomes a support level.

According to stock charts, a necessary component of this pattern is that a bullish trend has already developed. Because it is a bullish pattern, the length and duration of the trend are not as crucial as the robustness of the formation, which is paramount.

The rally began at the end of 2015 and took gold prices from $1,040 to $1,370 confirming the conclusion of a multiyear correction. This meets the criteria of an established trend.

If in the lows achieved this week hold, and prices move higher creating a higher low, the pattern would be in the final stages of completion, which would indicate an inevitable break above the major resistance in gold at $1,375 per ounce.

Wishing you as always, good trading,

Gary S. Wagner - Executive Producer

This report is now free and publicly available to everyone

Gold Forecast: Proper Action

This morning we issued a Trade Alert to BUY June gold

Maintain long gold @ $1289. Maintain Stop @ $1284

Closed trades:

GLD: On April 12th our stop was hit at $162. We went long at 162.82. Trade resulted in 0.82 loss per share.

Futures: Gold (GC J21) in at 1722.80. Out at at $1728 for a profit of $520.00- per Comex contract.
Forex: XAUUSD in at 1724.40. Out at at $1729 for a profit of $4.60- per ounce.
ETF's: GLD in at 161.55. Out at at $161.90 for a profit of $0.35- per share

SLV in at $24.24. Stop hit at $23.50, for a loss of $1.05 per share
May 2021 (SI K21) in at $26.26. Stop hit at $25.3 for a loss of $0.96 ounce
Forex silver in at $26.17. Stop hit at $25,30 or a loss of $0.87 per ounce

On February 18 we entered a long April Platinum trade. In at $1282. Our stop was hit today (02/26/21) @ at $1217.00
SILVER FUTURES MARCH: Entry at $27.36, and then closed the trade later @ $27.45.
XAGUSD: Entry at $27.26,, our stop was hit at $27.39

We closed our positions in SLV:
First leg SLV: @ 22.95 .out at @ $24.99
Second leg SLV @ 24.60. out at @ $24.99

On Thursday February 4 stops were hit on our long GLD ETF. We entered at 172.14. Our stop was hit at $168.29 (the open on Thursday) for a $3.85 loss per share.

GOLD FUTURES APRIL: Entry at 1845 - 1859 . Stop hit at 1813 - average loss $3900 per contract
XAUSUD: Entry at 1845 - 1857 . Stop hit at 1813 - average loss of $38 per oz
SILVER FUTURES MARCH: Entry at 25.42 - 25.46 . Stop hit at 24.11 - average loss $6650 per contract
XAGUSD: Entry at 25.33 - 25.40 - Stop hit at 24.11 - average loss $1.3 per oz
long February gold @ $1890.00 and stop hit @ $1902.20, for a profit of $1202.00 per contract
long Forex gold @ $1886.00 and stop hit @ $1898 for a profit of $12.00 per OZ
long March silver @ $26.31 and stop hit @ $26.41 for a profit of $500.00 per contract
long GLD @ $177.26 and stop hit @ $178.00 for a profit of $0.71 per share
long SLV @ $24.67 and stop hit @ 25.00 for a profit of $0.33 per share
long February Gold Futures at $1860-$1866 and stop hit at at $1869. Average profit $600 per contract
long XAUUSD at $1856-$1862 and stop hit at $1866. Average profit $6
long March Silver Futures at $25.16 - $25.25 and stop hit at $25.30. Average profit $450 per contract
long GLD @ $174.12 and stop hit at $175.78 for a profit of $1.66 per share
long GLD @ $174.12 and stop hit at $175.78 for a profit of $1.66 per share
long February Gold Futures at $1830 -$1843 and out at $1850 for a profit of $700 to $2000.00 per contract
long XAUUSD at $1841 and out at $1850 for a profit of $90.00 per mini 10 oz contract
long March Silver Futures at $24.29 and out @ $24.40 for a profit of $550.00 per comex contract
long GLD @ 1$71.50 and out @ $173.00 for a profit of $1.50 per share
long SLV @ $22.30 and out @ $22.50 for a profit of $0.20 per share
Long December gold at $1899. Stop hit at $1918, for a $1900 profit
Long forex gold at $1896.00. Stop hit at $1912, for a $1600 profit
Long December silver at $24.21. Stop hit at $25.07 for a $4300 profit
Long GLD at $180.46 and stop hit at $176.42 for a loss of $4.04 per share
Long SLV at $23.23 and stop at $22.78 for a loss of $0.40 per share
Long December Gold Futures at $1926 and stop hit at $1907.30 for a loss of $18.70 per ounce
Long Forex Gold at $1922 and stop hit at $1903 for a loss of $19.00 per ounce
Long December Silver Futures at $25.13 and stop hit at $24.73 for a loss of $0.40 per ounce
Long December gold at $1890, out at $1909.30 for a profit of $1,930.00
Long December silver at $23.95, out at $24.50 for a profit of $2,750.00
Long Forex gold at $1883.68, out $1907 for a profit of $23.32 per ounce
Long GLD ETF at $178.03, out at $179.80 for a profit of $1.77 per share
Long SLV ETF at $22.66, out at $22.03 for a loss of $0.63 per share

Gold Market Forecast

The last four trading days, before yesterday have resulted in new lower lows, we have also identified Five doji candles including yesterday's Hammer. The multiple dojis indicates a point when neither the bulls or bears have absolute control over pricing. It can be found as a rest before prominent trend direction continues, or a reversal when found within larger patterns such as a three river morning star. Today we got the upside bounce we were waiting for. The report today will look at a major patter: the Asending Triangle.

Market Overview

Economic Calendar