Gold formed a "hammer" candlestick on the charts yesterday, finding support at the 23.6% Fib retracement of the rally at 1614 and bouncing back above 1620 to end the trading day.
Gold has now spent a couple of days above the downtrend channel/triangle pattern and another day holding above here should see some shorts start to cover their positions and the price rise accordingly.
We might see quiet trading today as the markets anticipate the outcome of the FOMC meeting, a statement will be made tomorrow evening which traders will scour for evidence of further QE, if nothing specific is announced.
Our view is that no further QE will be announced this time, however the FOMC will continue to make the right noises about "using whatever measures are necessary" to stimulate the economy and we can expect further stimulus to be announced next month.
There is not a great deal of expectation of any significant announcements this time, so the response may be muted.
Gold has now spent a couple of days above the downtrend channel/triangle pattern and another day holding above here should see some shorts start to cover their positions and the price rise accordingly.
We might see quiet trading today as the markets anticipate the outcome of the FOMC meeting, a statement will be made tomorrow evening which traders will scour for evidence of further QE, if nothing specific is announced.
Our view is that no further QE will be announced this time, however the FOMC will continue to make the right noises about "using whatever measures are necessary" to stimulate the economy and we can expect further stimulus to be announced next month.
There is not a great deal of expectation of any significant announcements this time, so the response may be muted.