Gold Futures traded to a higher high, and a higher low than yesterday, the same is true when compared to Monday that being said price advances over the last three trading days have been nominal at best. With a net gain of only five dollars since Monday.
While our technical studies indicated that the conclusion to the most recent correction in gold ended last week, on Thursday. The data is soft when it comes to forecasting a strong trend, or a defined rally.
As we spoke about yesterday it is highly unlikely that the minutes from last month’s FOMC meeting would send shockwaves through the financial markets, rather it seemed as though any information had already been factored into current market sentiment and pricing.
Market sentiment was clearly defined prior to the release of today’s FOMC meeting in October. With both the Fed Chairman as well as John Williams the president of the New York Federal Reserve Bank coming out early with statements underlining the Federal Reserve is currently on hold in terms of rate cuts at least through the end of the year. In fact most analysts were not expecting any major pushback from the minutes
What remains at the forefront of market participants and traders’ minds is the current state of the negotiations between the United States and China.
On a technical basis we believe the current major support resides at $1446 which is the 23.6% Fibonacci retracement from a data set beginning at $1040 and ending at $1565.
We also see two fairly strong levels of resistance that are based upon moving averages with the 50-day moving average at $1485.20, and major resistance at $1495.30 to $1500. While the first level at $1495 represents the current 50 day moving average, the $1500 resistance area remains a key psychological level.
While we can expect increased volatility and price gyrations throughout the remainder of the year it will be fundamental events and accomplishments that will determine whether or not gold bulls remain in power or whether the bearish faction can move pricing lower based upon a resolution of the trade war and a return to more favorable economic outlooks..
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Wishing you as always, good trading,