FxWirePro: This Week May Mark the End of Gold Consolidation
FxWirePro: This Week May Mark the End of Gold Consolidation
After steady bull-run from late November to early February, Gold has moved into consolidation and ranging within $100 for past 10 weeks. Support lies around $1180-1200 area, while resistance is around $1260-1280 region.
This week is filled with immense risk event, which is sufficient to push gold for a breakout in either way. While we remain bullish on Gold over medium to longer term, current weekly candles are pointing to weakness in the resolve of the bulls. Tomorrow, FOMC is expected to announce its monetary policy and we feel market is mispricing the probability of a hike. Though it is largely unlikely that FED will hike but is not as unlikely as 98%. Moreover, recent improvements in stock market, easing in financing conditions, improvements in China and emerging markets may lead to more dissenters in FOMC, who may just win the day.
Larger number of dissenters (in March, there was one) or a hike can be bearish for the gold, which will push the yellow metal towards $1130 area, as Dollar goes strong. But dovish language likely to provide some relief, even in such a case.
Latest ETF flow data suggests, money is flowing out of Gold, reversing some of the big gains, early in the year.
Last week, Gold produced a long wicked inverted dragonfly doji in weekly chart, indicating bulls may be getting exhausted.
Gold is currently trading at $1234/troy ounce.
The material has been provided by InstaForex Company - www.instaforex.com
