Have Gold Prices Stabilized Or Can They Still Go Lower?

The key events that traders will be closely monitoring this week include – Federal Reserve Chair Jerome Powell speech on Thursday and the U.S Jobs Report on Friday, which is the most highly anticipated economic report of every month.

There will be a huge focus on Jerome Powell’s speech this week, especially as higher yields are starting to sound alarm bells. Rising yields typically signal that a potential spike in inflation is just around the corner.

The yellow metal has been in a downtrend for two months, but there’s three potential drivers that could reverse gold’s trend – rising inflation, a deflationary shock and the increased use of the Federal Reserve’s balance sheet to amass more debt.

If inflation quickly accelerates, traders will flock to gold as a hedge. If there is a deflationary shock, gold will benefit from real yields and the U.S dollar dropping lower. Finally, if the Fed signals it is ready to introduce yield-curve control, gold also benefits hugely.

Gold prices are currently trading sideways in a tight range, which ultimately indicates a big move is on the horizon. The only question now, is which way.

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions: