Gold Technical Pattern Target Hit

Gold has completed an inverted head and shoulders pattern and is pushing against some important resistance at the start of North American trading.

Gold Bars

Last updated on July 2nd, 2019 at 03:33 pm

Inverted Head and Shoulders Pattern Target Hit

Targets have been met for a technical pattern that was published earlier today and Gold is seen testing some fairly important resistance.

The technical pattern formed over the last 24 hours or so and is best viewed on an hourly chart. For the full write up, check out this link to an article published earlier today.

Gold Hourly Chart

Upside resistance at $1350 is significant and details are in a previous article. Specifically, the level was mentioned in the weekly forecast which can be found here.

Considering the major confluence of resistance in that area, it does not seem likely that we break above the level, at least not today.

Economic Events This Week

In the absence of a catalyst, gold prices can stall out here. As of right now, it looks like the Federal Reserve meeting might just provide that catalyst. The US central bank, who will meet tomorrow, stands to introduce volatility into the markets.

The main focal point for the Fed is forward guidance on a rate cut, or rate cuts rather. The markets have increasingly priced in rate cuts this year after the central bank had mostly been raising rates in the past few years.

Currently, the futures markets think the US will see at least 50 basis points in rate cuts by the last meeting of the year, if not more. The Fed should reveal intentions of doing something along those lines for gold to maintain its upside momentum.

If policymakers fail to see the doom and gloom of the economy the way the markets do, the US dollar stands to get a bid. And, as a result, Treasury yields stand to move up and the price of gold down.

We may see gold prices move somewhere near the midpoint of this week’s range ahead of the Fed meeting. After that, it’s up to Fed Chair Powell and his colleagues to determine the fate of the yellow metal.

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