Gold failed to break resistance at 1375 yesterday and is selling off this morning, with the chart pattern starting to look remarkably similar to the price action that followed the Non Farms Payroll (NFP) jobs report on 6 September.
In that scenario, gold jumped higher immediately following the data release, only to stall a day later and retrace the entire move with two trading sessions.
If this pattern is to be repeated, gold will retrace the FOMC "pop" entirely over the next few trading sessions, however a break above 1375 will invalidate this and suggest a move to 1435 in the short term.
As we commented in yesterday's blog, we still consider the down side to be the path of least resistance for gold with rising interest rates, low inflation and rising equities reducing demand for gold. Add in the drastically reduced physical demand from India due to government restrictions and winding down of tensions in the Middle East and it is easy to make a case for gold falling back towards 1180.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our next trade.
In that scenario, gold jumped higher immediately following the data release, only to stall a day later and retrace the entire move with two trading sessions.
If this pattern is to be repeated, gold will retrace the FOMC "pop" entirely over the next few trading sessions, however a break above 1375 will invalidate this and suggest a move to 1435 in the short term.
As we commented in yesterday's blog, we still consider the down side to be the path of least resistance for gold with rising interest rates, low inflation and rising equities reducing demand for gold. Add in the drastically reduced physical demand from India due to government restrictions and winding down of tensions in the Middle East and it is easy to make a case for gold falling back towards 1180.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our next trade.