Tuesday, 27 March 2018 04:44 WIB |
GOLD CORNER |Gold OutlookGold Corner
Gold continues to trade in the pattern that has developed since the Fed began raising rates. This consists of a weakening pattern into the anticipated Fed meeting, a blip lower on the announcement and then a strong rally.
We suggested that gold would potentially see a $1,307 print ahead of the announcement, with a suggestion to enter, when the news broke. The initial bounce to the $1,327 level was within reason but then gold prices blew higher on concerns of other developments.
China™s push-back on proposed U.S. tariffs worried the market and hurt the dollar as traders™ concerns about China™s continued support of the U.S. treasury market came into focus. Trade fears with China have impacted not only the dollar but equity markets, which tested their February lows.
President Trump™s replacement of H. R. McMaster with John Bolton, as National Security Advisor worried the market in respect to North Korea, as Bolton is considered a more aggressive war hawk. There was enough turmoil to force a short squeeze in the metals.
The market is close to a breakout, but the technical picture requires a bit more work. We see continued resistance at the $1,357 level and the market requires further short-term dollar selling to break through this line. Initial support rests at $1,342.