I believe this is a market that will continue to struggle in the face of higher interest rates, and of course, the fact that there are a lot of concerns out there when it comes to global growth in general.
Gold markets have been relatively quiet as we awaited the Federal Reserve meeting on Wednesday. That being said, we have seen a lot of noise in the general vicinity, and now it’s a question as to whether or not we can get some type of clarity for a longer-term outlook before gold can settle everything out. After all, the Federal Reserve continues to be very tight with its monetary policy and did in fact raise interest rates by 75 basis points as anticipated.
When you look at the charts, it’s easy to see that the $1700 level has been important over the last couple of years, so the fact that we have bounced from there should not be a huge surprise. The question now is whether or not we can break it back down below it? If we do, then the gold market will be more likely than not to drop all the way down to the $1500 level over the next several months. That being said, we have some work to do before that happens. In fact, we need to break it down through the $1680 level, as the $1700 support level is basically “$20 thick.”
Rallies at this point will have to deal with the $1750 level, an area that I think is going to be a bit difficult to overcome. At this point, even if we broke above there, I think it’s likely that we would see this market struggle to go much higher, with the $1800 level above being a major barrier that will be very difficult to get past. We have the large, round, psychological significance of the number, we have the major selling area there as well, as well as the previous trendline and the 50 Day EMA. With everything said, I believe this is a market that will continue to struggle in the face of higher interest rates, and of course, the fact that there are a lot of concerns out there when it comes to global growth in general. The US dollar has been like a wrecking ball over the last several months, and I think that will continue to be the main theme here, as this market will continue to pay close attention to the headwinds that the greenback causes this market.
Ready to trade today’s Gold prediction? Here’s a list of some of the best XAU/USD brokers to check out.