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October 2, 2018

IronFX, Gold Market Outlook - Gold preparing for the Jump

fbs gold metal spot online investment trading AU

The only factor that could drop Gold prices is information from the FED on further future rate hikes.

This article is originally referred from IronFX News.

Gold Prices made a comeback on Tuesday, after some heavy trading sessions in the previous days depreciated the Bullion to its September lowest price.

Analysts and market participants, observing the fundamental news indicated the latest agreements on the NAFTA deal as the main event behind the precious metal obvious strengthening.

It was said that the optimism coming from the last-minute deal between the United States and Canada on Sunday, to form the NAFTA trilateral pact with Mexico, had turned investors towards Bullion.

In the previous days, Gold trading and physical buying had picked up as prices were seen diminishing.

Gold looks very attractive especially under $1,200 per ounce, and investors are willing to stay in the market until the strong run for the Dollar turns in the opposite.

Gold lost most of its value from the improving US economy, along with its rate hikes which could be forecasted to continue well in the following months and year.

However, the opinion of the Federal Reserve Bank of Minneapolis President Neel Kashkari opposing the next rate hike stands out and is in line with our view.

Kashkari does not vote on Interest rate decisions this year, but due to the foundation of his opinion, an interesting perspective was observed from our side.

He stated that US Bond Yields, which could be a measure of feedback, could be indicating that the US economy may face some difficulties in the future and growth may not be as smooth as forecasted.

We also share the opinion that the US economy maybe reaching its high at the moment but could be in for a correction, as when you’re at the top the only direction you can go is down.

Furthermore, trade wars have not settled yet and the Chinese are still looking for ways to reply to the tariffs that have been enacted towards them.

So we could expect a surprise retaliation or the trade war may continue for months as no side is backing down.

This could have a significant effect on the US economy coming from the US companies which have expressed their fears over the matter.

If domestic worries prevail with retaliation looming, anything could happen.

On other news, Australia’s government anticipates their resource and energy exports to rise to A$252 billion ($182 billion) for the rest of 2018 moving into 2019.

Aussie officials, said that rising commodities prices such as natural gas and a weaker Australian dollar could help boost their exports significantly.

Australia’s precious metal market could be regarded as a future rising market, keeping in mind that China is a primary customer along with Asian Countries following.

As a conclusion, most analysts, bearing in mind the precious metal market remains oversold in the previous months, anticipate a change in direction due to the fact that the instrument is the ultimate wealth preservation asset.

The only factor that could drop Gold prices is information from the FED on further future rate hikes.

Confidence in the financial markets is not to be taken for granted and so the precious metal is probably staying in the picture and could even be in for a Jump.

Gold 1 Hour Chart

If Bullion is in for a rise it could aim for our 1197.27 (R1) resistance level and target the $1,200 round number and psychological barrier.

A break above $1,200 suggests an extension to 1202.25 (R2) resistance barrier.

The market sentiment could change completely, if gold rises above 1200 and maybe break even above the 1,202.25 (R2) resistance hurdle, aiming for the jump mentioned in the fundamental analysis.

To the downside, the initial support comes in around 1191.08 (S1) support level which has not been clearly broken today.

Even lower is our 1184.90 (S2) Support barrier which was somewhat breached last week.

If XAU/USD falls below 1185, then the next stop could be 1180.

Closing below 1180 on a daily basis, could imply that more downside price pressure is coming.

Original Source: IronFX News

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