Gold markets rallied a bit during the trading session on Friday but rolled over at the $1520 level II for a shooting star. That shooting star of course is a negative sign and suggests that perhaps we are going to continue to be very choppy and noisy. Longer-term, I think we could probably go higher if we can break above the highs from the Friday session, because it would not only be a resumption of bullish pressure, but it would also show a collapse in selling pressure.
Price of Gold Video 28.10.19
When you look at the longer-term chart, we are forming a bullish flag, and that of course is a very bullish sign. A break above the top of the candlestick for the trading session on Friday has the market going much higher, perhaps even as high as $1750 level over the longer term. Alternately, if we were to break down below the $1450 level, then the market could rollover another $50 or so. All things being equal though, we have the Federal Reserve coming out with an interest rate announcement on Wednesday that should be the next catalyst for the next move.
While we already know that the Federal Reserve is likely to cut interest rates, the real question will be whether or not they sound even more dovish going into the future. If that’s the case, that should continue to drive gold higher. Obviously, if the market was to receive a hawkish message in the statement, that could be negative for gold.
Please let us know what you think in the comments below