Gold Reverses Staging a Small Recovery
Although gold prices closed lower on the week, prices recovered with a gain of 6 dollars. Reacting to today’s US jobs report, as well as gauging market sentiment from members of the Federal Reserve to determine whether or not a December rate hike is still in play, traders were able to move the market into solid positive territory by the close.
Gold prices have been in a deep and dramatic decline ever since they reached this year’s high at 1263 during the first week of September. Even though gold closed lower on the week, with the last three consecutive days characterized with lower highs and lower lows, a case can be made for a potential recovery, and support for gold pricing occurring in this area.
The totality of this current retracement has given back roughly a .618% retracement from recent highs. The former rally moved gold prices a total of $163 as it traded from $1200 to the rally’s conclusion at 1363. This is a logical point to look for a conclusion to the current retracement.
A large portion of this most recent price correction in gold is directly attributable to a strengthening US dollar. Dollar strength has been predicated upon strong economic data from the United States, which in turn increased the probability that the fed will enact one more interest rate hike this year, in December.
Although market sentiment believes there is an extremely high probability of a December rate hike, Fed policy voter Robert Kaplan said he is still undecided about a December move.
In a commentary reported by MarketWatch, Carsten Fritsh a commentary analyst at Commerzbank said “Gold traders have been on the defensive as the dollar hit “its highest level on a trade-weighted basis since mid-August. This development has been driven by the very robust U.S. economic data released in recent days, which have caused the Fed rate increase expectations to pick up.”
Today’s video report will detail our current market analysis with a revised Elliott wave count. We will look at the distinct possibility that activity this week is signaling a conclusion to the selling pressure evident in gold for the last month. We will also detail our new upside target for this current rally.
Wishing you as always, good trading,