The bottom line is that a breakout on the monthly gold chart that occurs in the days following Today’s Fed announcement could be a game-changer for gold market investors.
Submitted by Stewart Thomson, Graceland Updates:
- The next US central bank interest rate announcement is scheduled for tomorrow afternoon. Gold and related assets are now in “pause mode” against most fiat currencies.
- Gold has a rough general tendency to decline ahead of a rate hike, and then rally strongly after a hike is announced.
- That has happened in textbook fashion with the first three rate hikes in the current hiking cycle.
- There’s no guarantee that it happens again this time, but if it does gold should take out the weekly chart downtrend line that has the attention of institutional technical analysts.
- Double-click to enlarge this fabulous monthly gold chart.
- Note the buy signal flashing on the Stochastics oscillator at the top of the chart.It’s happening in the 50 area, which indicates strong momentum.
- Also, the TRIX indicator at the bottom of the chart is about to cross over the zero line. This is extremely positive technical action.
- Technical breakouts that are produced by fundamentally important events are significant.
- The bottom line is that a breakout on the monthly gold chart that occurs in the days following tomorrow’s Fed announcement could be a gamechanger for gold market investors.
- Double-click to enlarge this weekly chart of the US dollar versus the Canadian dollar.
- The dollar already looks like a train wreck against both the Japanese Yen and the Indian rupee.Now it’s poised to go off the rails against the Canadian dollar. I’ve set an initial target zone in the $1.25 area.
- Double-click to enlarge this oil chart.
- Oil is by far the largest component of the major commodity indexes.A rally in the Canadian dollar tends to coincide with a rally in those indexes.
- That’s inflationary, and more good news for gold.
- Good news for gold is happening around the world, and when it’s coming from India, commercial traders tend to buy long positions in size on the COMEX.
- After years of gold-negative policy announcements, India’s government has begun to make announcements that are cheered by the gargantuan gold jewellery industry.
- Millions of industry workers have been sidelined by the barbaric legislation of the government in recent years.I’m predicting that most of them will be back at work within twelve months.
- India’s gold jewellery market will be in expansion mode very quickly, which means the COMEX gold price will be in upside expansion mode even more quickly!
- Active traders can take action on the buy-side right now to capitalize on a potential rate hike rally following tomorrow’sFed announcement. Long term investors can place buy orders in the $1220 price zone.
- My personal focus for fresh precious metals sector buying is GDX, the gold stocks ETF.
- Double-click to enlarge this GDX versus gold chart.
- There’s not much point in buying a high-risk asset class like gold stocks if they are not poised to outperform the underlying low-risk asset class of gold bullion.The good news is that gold stocks are technically poised to do so right now.
- Most of the gold stock pipeline news flow is now positive.More rate hikes are needed to reverse the multi-decade bear cycle in US money velocity, and Fed-focused economists have assigned roughly a 95% chance of a rate hike tomorrow.
- GDX has been drifting sideways to lower against gold bullion since February. I’m a very aggressive buyer on any price weakness between now and tomorrow’s Fed announcement. There’s no guarantee that the Fed’s fourth rate hike will be followed by a fourth glorious gold sector rally against global fiat, but I will suggest that all investors should be poised to profit, if it happens!
Special Offer For Website Readers: Please send me an Email to[email protected] and I’ll send you my free “Oil My Squeaky Gold Stocks Wheels” report. I highlight 3 oil stocks poised to produce sector-leading gains. I also cover 4 gold stocks that are already rallying and poised to surge even higher, with key tactics for each stock!
Thanks! Cheers Stewart Thomson Graceland Updates
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