The gold markets initially went sideways during the trading session on Tuesday, using the $1275 level as a bit of an anchor for markets. Ultimately, it looks as if the market will continue to sell rallies, but when I look at the hourly chart, it looks like we are going to get that bounce relatively soon as the stochastic oscillator is starting to cross over in the oversold region, so therefore waiting for a small bounce might be a nice opportunity to short again. I believe that the $1275 level should continue to be a bit of a “ceiling” in the market, least in the short term. The US dollar is starting to rally significantly, due to the idea of tax reform coming out of the United States Congress.
If we were to break above the $1275 level, that would be a very bullish sign, but right now I don’t think it’s going to happen anytime soon. I think that the $1250 level will be a major area of contention, as it is essentially “fair value” of the consolidation that we have seen over the last year. In general, the market is going to react more to the US dollar than anything else right now, and it appears that we are starting to see a significant amount of volatility, but if we get a decent tax bill, and right now looks as if the corporate rate might be 20% in America, the US dollar should explode in value against certain markets, and Gold markets look very likely to be one of those. That will be also influenced by the idea of higher interest rates in America.
Gold Outlook Video 06.12.17
This article was originally posted on FX Empire