Tactics and Analysis, June 22, 2017 – Gold Price Set for Additional Volatility

Gold’s selloff since the interest rate hike in the U.S has been brought to a halt in the short-term and a reversal has been underway the past two days. Speculators may be tempted to look for some additional upside movement in the short-term.

Gold Bounces Back

In the past twenty-four hours Gold has shown the ability to bounce off short-term support.

The precious metal has made over a ten dollar gain the past day and is trading near the important 1255.00 U.S Dollars an ounce ratio. Gold had suffered selling pressure the past week, after the U.S Federal Reserve increased its interest rate and made it known another hike is likely to come this year.

However, most investors had already positioned themselves for the Fed’s interest rate move and outlook. Meaning other forces have been at work also in the Gold market, which caused it to trade near support levels of 1243.00 U.S Dollars an ounce only two days ago.

Two Recent Factors in Gold Price

It may be that Gold has seen two potential factors affect its value. In the past couple of weeks global equities have continued to test record highs. As the Dow Jones Industrials in the States, and the Nikkei Index in Japan have proven to have a significant risk appetite, Gold faltered.

However, as caution has come into the broad markets the past two days, because of worries about weak Crude Oil prices and their potential effect on financial institutions, Gold has managed to climb perhaps on safe-haven buying. A complicated mix of factors has caused a rather wide range in the precious metal the past couple of months.

Speculative Buying Opportunity in Gold

A look at a long-term chart shows an interesting range has developed since the beginning of December 2016.

Gold has put in an upwards trend under the shadows of the interest rate hikes from the Federal Reserve. In December and March, the precious metal rose instantly upon the hikes from the U.S central bank. However, last week’s trading results proved different – because Gold sank in the immediate aftermath of the Fed’s latest move.

The roller coaster range in value from Gold the past week indicates some investors believe Gold is near important resistance levels. But the question is what the higher range of resistance will allow? Can Gold in the short-term climb back to values it saw two weeks ago – when it was around 1265.00 U.S Dollars an ounce? Traders may be willing to speculate that additional value will be seen in the precious metal in the coming days.

In the short term, we believe Gold may be positive. In the mid-term and long-term we are unbiased.

Yaron Mazor is a senior analyst at SuperTraderTV.

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