SHARPS PIXLEY - Gold FOMC bound
Gold steadily holding on this week gained as traders bet on safe haven assets due to the uncertainty in the Eurozone (revisiting a Greek Exit only this time looking more viable), amid a strong US dollar gold outperformed as we start 2015 and the failed “Santa Rally” has created a short term diversification away from equity to bonds.
So what can we expect from this week FOMC meeting minutes? Not much really apart from the key words such as “patience” and “no rush” as the members felt that they need more time to digest the economic situations over the next few months. Time in her side as Yellen will provide positive rundown on how the US economy has done and as always a cautious hint that the Fed is always on standby to stick with 0 % interest rate for the foreseeable future but could increase in April or June.
Taking into account that we are just about to get into the full swing of trading, volume will remain relatively mild but as long as gold managed to hold above $ 1200, next target of resistance is to overcome $ 1222 area to target $ 1238. Market prices will be erratic once traders digested the minutes so locking in some profit is advisable at this point. At the moment, the gold bull managed to batter higher despite a stronger dollar but should Miss Yellen come to rescue the equity rally again then be prepared to see gold retesting $ 1185 or even lower.
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07 Jan 2015 | Categories: Gold