CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

What Does the Gold Market Know

January 29, 2020 4:49 PM

What Does the Gold Market Know?

The FOMC left rates unchanged today, targeting the 1.5%-1.75% range, as expected.  The only small change the Fed made was to raise the IOER rate by 0.05% and announced that they would be extending repo operations until April.  Otherwise, the statement and the press conference were….boring (for lack of a better word).  However, as soon as the statement was released, gold began to go bid:

Source:  Tradingview, COMEX, City Index

Perhaps it was just back to business as usual.  Below is the base chart I’ve been using for Gold.  It’s the daily futures chart, which has broken out of a flag pattern and is currently on its way to target near 1723. Price had paused along the way and the RSI moved to extreme overbought territory (above 80).  They slight pullback gave the RSI room to unwind back into neutral territory. 

Source:  Tradingview, COMEX, City Index

Maybe someone knew early that Google was going to announce that they temporarily going to close all office in China due to the Coronavirus (source: Verge). 

Or perhaps someone was just trying to push price higher through horizontal resistance, as seen on a 60-minute chart:

Source:  Tradingview, COMEX, City Index

On a 240-minute chart, price is trying to break higher out of a symmetrical triangle.  Perhaps someone was trying to push it through the upper trendline.

Source:  Tradingview, COMEX, City Index

Does the Gold market know something other markets don’t?  Whatever the reason for gold moving higher on the release of the FOMC statement today, it still looks like it’s trying to head towards the 1723 level!  Price normally doesn’t move in a straight line, so expect some pullbacks along the way if it does continue higher!


StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024