A lot is going on in the market right now, and investors have to decide where to put their money. Gold is one of those assets that still remains uncertain and price has reflected that. There are some key things could launch gold's price higher, however, a big indicator casts a shadow over the metal's near future.
Near-term Outlook on Gold
Price hit a multi-bottom low before abruptly bouncing higher today. Due to the strength of this support level, gold has a good chance of catching a decent swing to the upside. So, near term, a long trade could be made out of this metal.
Today, gold's price sunk before the New York session on dollar strength. It seems like there was a Friday selloff as investors turn to liquidate their risk-prone positions.
If price does run up, it probably won't get higher than the $1860s range if price even moves that heavily. Some might even argue that the metal will not be able to break above the falling trend line that has served as much resistance in the past. Overall, it looks like there is limited upside for gold in the short run.
Long Term Outlook on Gold
The long run, however, looks more promising. Inflationary pressures are not going anywhere any time soon. Conflict in Europe continues to cut supply and drive commodity prices higher. Economic growth is slow to recover as well. All of these things are drivers of gold.
This isn't to say that price may continue to fall to lower levels. There are key levels of support that could be good for building positions.
In the end, it's how you as a trader would like to go about this. Do you want to trade gold or invest in it for the long run? Building positions will take much longer but could end up being more profitable. If you don't feel comfortable in the long run, quick trades would work too.
The Big Warning
Something dire has entered on the bullion's price chart, something every investor dreads. A death cross pattern looms over investors' heads as the 50 day moving average gets real close to crossing under the 200.
The next couple of days will determine the overall strength of the market for gold. If the death cross ends up happening, we could see gold slash down to the $1600s and even the $1400s. This is extremely concerning for investors as they still try to decide where gold will move in the future.
Smart Money Tracker
See where big money is flowing with the A1 Edgefinder's smart money tracker! With one click, see where the biggest money flows are entering and exiting through COT data.
While today is relatively uneventful in terms of major economic news around the world, this will not be the case for long. There is a chance that the forex market could witness a Kiwi Dollar spike tomorrow due to the Reserve Bank of New Zealand (RBNZ) announcing their latest interest rate hike at 8 pm […]
As many of you already know, the EdgeFinder, A1 Trading’s market scanner software, can be incredibly helpful for discerning which securities are especially worth watching for potential trade setups. Whether you are planning on buying or selling a currency pair, commodity, bond, or more, EdgeFinder analysis is so robust that its ratings and biases can […]
This morning at 2 am Eastern Time, the Office for National Statistics reported the latest monthly round of Consumer Price Index (CPI) and Core CPI increases within the United Kingdom’s economy. Annual CPI, which had been forecasted to hit 10.7%, instead jumped by an astonishing 11.1%, making for another multidecade high; annual Core CPI also […]
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here