Gold Forecast October 29, 2014, Technical Analysis

The gold markets tried to rally initially during the session on Tuesday, binds found enough resistance above the $1230 level to turn things back around and form a shooting star. The shooting star of course is a bearish sign, showing that the sellers are going to continue to come into the market and sell when we rally. The daily candle of course is very bearish, but it does sit upon the $1220 level. That is an area of that has been supportive recently, as well as resistive in the past. It is because of this that we believe the area is one that should be paid attention to as it should be significant enough to determine the future direction of the gold markets.

Adding intrigue to this level is the fact that today we get the Federal Reserve interest-rate decision, and the statement that follows. With that being the case, it’s very likely that the market will be very sensitive to not necessarily the interest-rate decision, but the statement. The statement came give us an idea as to whether or not the Federal Reserve is looking to hike interest rates anytime soon. If the statement is somewhat hawkish, it’s very likely that the US dollar will continue to go higher as far as value is concerned, and with that it should drive down the price of gold.

I would anticipate that the markets will be fairly quiet in the short-term, but by the end of the day we should make a decision. It is possible that the Federal Reserve hints that we are not going to see any type of hawkish action soon, and that could drive down the value the US dollar, and therefore make gold much more attractive. If we get a break above the top of the shooting star from the Tuesday session, we would then anticipate that the gold market should continue to go much higher, probably to the $1250 level first, and then higher than that based upon interest-rate expectations in the future. Because of this, today is going to be a very important day for gold.