WHAT HAPPENS WHEN MARKET GOT AHEAD OF ITSELF?
well, there is no doubt that Sentiment has clearly turned bullish for gold as prices broke through critical resistance, pushing to their highest level since early-April 2018. The solid uptrend which we have witnessed in the precious metal market was mainly due to Federal Reserve loosen monetary policy with the growing expectation that the first rate cut would come in July. However, With unemployment sitting at near a 50-year low, economic data holding relatively steady and inflation pressures non-existent, it's difficult to see the U.S. central bank cutting interest rates so soon. we believe if the fed doesn't cut rate for July which we are expecting then sentiment could shift again and that will be negative for gold.
You need to keep in mind that at the moment it seems that markets have gotten ahead of themselves and pricing in a more than 80% chance of looser U.S. monetary policy in July however if the fed won't cut rates then it will turn to be negative for the entire precious metals space.
on the upside, we believe that gold prices need to push above $1,372 an ounce to generate new upside momentum.
We were waiting for today's closing price in gold before publishing this paper, if gold were able to broke below $1350 per ounce as a weekly close then our sentiment may have been shifted towards the precious metal sector.
The recent move which we have witnessed have happened too fast. Usually these types of moves whether positive or negative are not sustainable as they are based more on speculation that they are based on any fundamental or technical shift. Those who are involved in precious metal trading and investing from a while understand the importance of $1350-$1370 level. we have already seen seven previous attempts of gold to break above its key psychological resistance without any success so far. The recent high was formed in gold was in July 2016 at $1374, since then we haven't seen the yellow metal to touch $1370 level.
You need to keep in mind that at the moment it seems that markets have gotten ahead of themselves and pricing in a more than 80% chance of looser U.S. monetary policy in July however if the fed won't cut rates then it will turn to be negative for the entire precious metals space.
on the upside, we believe that gold prices need to push above $1,372 an ounce to generate new upside momentum.
We were waiting for today's closing price in gold before publishing this paper, if gold were able to broke below $1350 per ounce as a weekly close then our sentiment may have been shifted towards the precious metal sector.
The recent move which we have witnessed have happened too fast. Usually these types of moves whether positive or negative are not sustainable as they are based more on speculation that they are based on any fundamental or technical shift. Those who are involved in precious metal trading and investing from a while understand the importance of $1350-$1370 level. we have already seen seven previous attempts of gold to break above its key psychological resistance without any success so far. The recent high was formed in gold was in July 2016 at $1374, since then we haven't seen the yellow metal to touch $1370 level.
