Gold Prices September 16, 2015, Technical Analysis

The gold markets fell slightly during the course of the day on Tuesday, as the $1100 level continues to be rather supportive. We believe that this market will continue to find buyers every time we reach down towards that area, mainly because we see a significant support “zone” down to the $1080 handle. With this, we are willing to buy bounces, but would be a bit hesitant to sell on a break down below that area because we see there could be so much in the way of trouble for the sellers all the way down. On the other hand, if we can somehow break down below the $1080 level, we would then start selling again.

We do recognize that rallies could offer unique selling opportunities as well. The gold markets will be heavily influenced by the US dollar, which of course will be heavily influenced by what goes on during the interest-rate announcement on Thursday, and of course and almost more importantly, the statement that follows. After all, the market is not sure what happens next, as the Federal Reserve may or may not raise interest rates, and more importantly than that as they have to wonder whether or not the Federal Reserve will be willing to continue to raise interest rates.

A higher dollar will of course work against the value of gold markets in general, and could send this market looking for what we see as ultimate support down at the $1000 handle. From a longer-term chart perspective, that’s exactly what we would anticipate seeing. However, we recognize that the announcement that comes out on Thursday is probably the biggest single economic announcement for the quarter if not the year. With that in mind, we recognize that the market could change their tone completely based upon just a few seconds Thursday afternoon. Ultimately, in the meantime you have to keep a fairly short-term perspective, so therefore we would be out of any trade position before that announcement on Thursday, regardless of how profitable or negative it is. In the meantime, pay attention to your levels and keep your stops tight.