The precious metal continues to find itself locked within a tight trading terrain. After an attempted push higher Gold finds itself right back within a consolidated territory that retail traders may find opportunistic. Swirling sentiment in the broad markets caused by USD centric strength has effectively caused choppy condition in gold as it showed some speculative buying power sentiment remains via value seekers producing muscle, but was then hit by reversals lower sparked again as caution persists in many mindsets. Speculators need to understand the battle will remain intact near-term.
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Fed Hold Leaves Gold Buyers Cautious Ahead of US Data
Taking advantage of short-term swings in the price of gold remains the flavor of the day (and has been seen throughout the week). Cautious sentiment has seen support and resistance levels get tested. However, in the past half day gold has been pushed lower again, this after seeing a brief momentum swing upwards that sparked some folks to proclaim the worst was over in the commodity.
Now speculators are being met by renewed caution in the broad markets led by the USD which is finding more friends as the U.S Federal Reserve refused to discount the notion yesterday – during its FOMC pronouncements – that another interest rate hike in December is out of the cards. Meaning that cautious financial institutions remain a force in the marketplace and even though inflation is real and sticky because of higher energy costs, gold bugs are staying out of the light and seemingly waiting for additional evidence to suddenly emerge and buy with courage.
Gold’s $4,000 Support Zone Remains a Test of Confidence
Once again gold is near the $4,000 vicinity. The price of the commodity as of this writing in fast paced conditions is around $4,030.00. Moves have been fast, yesterday’s high was almost 4,085.00 USD early yesterday, but then swift selling happened. However, before buying notions are completely destroyed, support does remain curious. The belief that gold will continue to hold the line around $4,000.00 to $3,970.00 has not been destroyed yet.
The problem in gold for the moment is that an overriding cautious attitude dominates current sentiment. The USD is not only strong, but risk events are on the horizon via U.S mid-term elections, the Middle East situation, and also fragile sentiment on Wall Street exists. Yes, typically most of these things would help gold find additional takers and friends, but for the moment the precious metal instead faces headwinds. While some traders may be bold enough to step in and buy gold they should be prepared for a trajectory that will include bumps on the road.
Dollar Strength and Event Risks Cloud Gold’s Near-Term Outlook
Gold may continue to face some downwards momentum and a retest of lower terrain if USD centric strength continues to be seen. The marketplace will be choppy, the USD may start to look like it is in oversold territory to some speculators and perhaps even financial institutions. Yet, before day traders seek strong upside velocity in gold, they should acknowledge that the broad markets may remain stuck in a known testing ground today and tomorrow.
Nervous sentiment going into this weekend is likely to grow as large players prepare their positions for the week ahead which has many concerns ahead. Gold traders should use limited leverage and remain conservative under the present conditions. Cashing out short-term winning bets might prove productive under the current circumstances.
Gold Price Chart
Short-Lived Rebounds Highlight Gold’s Struggle to Build Momentum
Speculators who are keen on pursuing upwards momentum certainly were rewarded the past couple of days, this before another selling track started in earnest. Those looking to be buyers may want to use technical support levels as an ignition area for buying opportunities if they remain cautious. Support levels are intriguing and certainly will be used as a testing ground by folks who think gold has been oversold. The problem may be to create significant enough momentum upwards. Therefore bullish gold traders may want to look for quick hitting targets only.
Gold’s Trading Range Reflects Unresolved Market Uncertainty
Gold has proven a difficult testing ground the past few weeks and this is unlikely to disappear in the short and near-term. Too many questions regarding outlook remain in the mindsets of financial institutions and large players to launch a sudden change of direction. Gold has been choppy and is likely to remain within its known range into the weekend.
Gold Short Term Outlook:
Current Resistance: $4,040.00
Current Support: $4,020.00
High Target: $4,065.00
Low Target: $4,005.00
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