GOLD Is Muted – Is This A Silence Before The Storm?

Yesterday, gold moved exactly as we predicted in our 6th of March Morning Brief. Our gold signal matured to profit, giving us some green pips. This was due to Janet Yellen arousing stronger Dollar sentiment in the market. The majority of traders switched their investments into the U.S Dollar and left the safe haven investments. 

Major Reason for Bearish Gold

The market is expecting interest rate hikes from the 14- 15 March FOMC meeting minutes. Taking clues from last weeks speech by Fed Chair Janet Yellen, she is quite optimistic about the interest rate hikes. However, the major focus remained on “inflation” and “unemployment rates”. If both of the macroeconomic factors are kept on the right track, then a rate hike is definitely coming.  

Big Ascending Triangle Pattern

At the moment, gold is stuck in a narrow trading range of $1227 – $1223 and has formed a couple of Dojis and spinning top candlestick formations in the 1- hour chart, demonstrating indecision between buyers and sellers. That’s usual to have in decisions patterns before major news. Besides that, let me attract your focus towards a big ascending triangle pattern in the 4- hours chart. The ascending triangles are meant to break upwards most of the time. We definitely need a major fundamental reason to provide new trends for the yellow metal.

Economic Events on the Table

We have sufficient economic events to support a major movement not only in the Forex market but also in the Bullion. These events include:

• ADP Non-Farm Payroll
• ECB rate decision
• NFP (Non-farm Payroll  
• Unemployment Rate

Gold Signal

Investors are recommended to keep their selling positions only below $1222 with a stop loss above $1226 and take profits at $1219.

Alternate Scenario: Gold is likely to add more than 100+ pips on an upward breakage of a triangle pattern. The potential targets are $1233 & $1237