In this article we will try to find the true direction of GOLD. For this, we are going to search about the effects of the rise, check the eventsÂ and try to figure out what happened and what will happen next.
Why did GOLD rise?
In this analyse, we have to check the reason of the reversal of down trend in GOLD. Is this a reversal or just a retracement? Everybody knows that the main effect of this rise is FOMC Statements and Yellens speech.
- Yellen did not use “patient” in the speech.
- FOMC Scales Back Expectations For Rate Hikes
- USD Index fall, USA 10 yrs BondÂ yields were down
As you see the USD Index chart when FOMC statements came in and after Yellen’s speech, USD Index had fallen down with a huge range and also GOLD made a reversal with high volatility. With this rise, traders got into position with a positiveÂ psychology of that GOLD got in up trend.
Rise will continue or not?
To decide if GOLD would continue its movement, we have to check the items below;
- As long as short term reaction sells occured, USD Index is in up trend
- USA and EuropeanÂ markets are still in long term up trend
- USA 10 yrs Bond yield rates are expected to rise in time
- There is no signal for a physical demand in GOLD novadays and in the future
- FED is checking economic indicators and does not seem to increase rates soonÂ but will
So according to this data, we can say YES, GOLD prices willÂ continue to go down in long term.
Which levels are critical? Continue To The Next Page