News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Feels like the market has been front-running next week’s FOMC announcement, which will reveal updated dot plot projections. Expectations clearly set for a more hawkish shift in guidance. That said, if the Fed does not deliver, US Dollar bulls could be disappointed. $USD $DXY https://t.co/o2v6ibac3L
  • USD/CAD has been chopping around the past week-and-a-half, offering virtually no cues on its next direction. Get your market update from @PaulRobinsonFX here:https://t.co/eq1YkOa3mC https://t.co/V6h8BjyeGa
  • FDA panel votes 16-3 against approving Covid-19 booster shots - BBG
  • RT @C_Barraud: 🇺🇸 Americans Haven’t Been This Down on #Housing Market Since 1982 - Bloomberg *Link: https://t.co/wWFnbAwIDO https://t.co/6G…
  • US Dollar Price Action Setups Pre-FOMC: EUR/USD, GBP/USD, USD/CAD https://www.dailyfx.com/forex/analyst_picks/todays_picks/james_stanley/2021/09/17/US-Dollar-Price-Action-Setups-pre-FOMC-EURUSD-EUR-USD-GBP-USD-GBPUSD-USD-CAD-USDCAD.html https://t.co/J25MYsXCa9
  • The US Dollar is pushing up to a fresh September high after the release of University of Michigan Consumer Sentiment data. Get your $USD market update from @JStanleyFX here:https://t.co/2CDNZh2a89 https://t.co/bULXuCaHKk
  • I have this $SPX chart taking over one of my whole screens, and I just keep staring at that 50-day moving average... https://t.co/R9LQAuL2DL
  • RT @TheStalwart: Nice chart, which shows why countries in green on the perimeter, like Iran, Peru, and Turkey are known for their stability…
  • Selling pressure strengthening in Wall Street two hours before the close. S&P 500 down roughly 1% intraday, the largest decline since August 18th #trading $SPX $SPY
  • One of the strongest correlation with Bitcoin at the moment is the US 10-Year Treasury yield https://t.co/uZBzJ7yiXf
Can Gold Prices Rally with Fed Raising Rates?  Patterns Think So

Can Gold Prices Rally with Fed Raising Rates? Patterns Think So

Jeremy Wagner, CEWA-M, Head of Education

Talking Points

-Gold prices fell nearly 20% in the last half of 2016

-The triangle in August and September 2016 suggest the downward correction is temporary

-Targets include $1,280 and possibly higher in 2017

Gold prices in 2016 has seen a tale of two halves. During the first half of 2016, gold prices increased nearly 30% to reach a high of $1375. The last jab higher was fueled by the emotion of the Brexit vote in late June when the Fed Fund futures softened their rate hike path.

Then, as traders began to digest what Brexit really means, we saw gold prices sell off nearly 20% from those highs down to $1122 in December. The ugliness of Brexit was to be dealt with off into the future and markets could focus on getting through US elections. We can see the surprise result of Donald Trump winning the White House caused a temporary jump in gold prices.

Peering into 2017, the technical pattern for gold prices appears incomplete to the upside. I know, it seems strange that at a time when the Fed is increasing rates an asset such as gold would outperform the US Dollar. According to the Elliott Wave model, the odds are shifting towards higher prices.

The technical pattern since the highs in July 2016 are taking the shape of a corrective move. The big clue here is the price action in August and September 2016 appears to carve a triangle formation. We know from Elliott Wave Theory that triangles print in corrective waves or in the fourth wave position of an impulse. Since the triangle appears early in the formation, it clearly would not be a fourth wave of a bearish impulse. By the process of deduction, that leaves the whole structure from July 2016 as a corrective structure.

(To learn more about impulses and triangles, read page 3 & 4 of the Advanced Elliott Wave Guide found here.)

Therefore, if the price action since July is likely corrective, that increases the odds this current down trend is a large ‘X’ wave or ‘B’ wave of a flat. (Page 5 and 6 of the Advanced EW Guide)

That means there is an increased chance that a ‘Y’ wave or ‘C’ wave is coming. Both waves imply similar things and that a move towards $1,280 and possibly higher is elevated.

The low we found in December 2016 at $1,122 may prove to be an important low. Notice how wave (y) is 1.618 x wave (w) = $1,120.

Additionally, the 78.6% retracement level of the December 2015 to July 2016 high is near $1,117. As a result, we have several longer-term wave relationship coming into play near December’s $1,122 low.

If gold prices are successful on moving higher, they may find some static near $1185-$1205. A successful move above this zone begins to elevate the bullish outlook more.

What does that say for the Fed? Well, that is another discussion for another day, but it does hint that the Fed may underperform on rate hikes. This underperformance seems to have been perpetual since rate collapsed back in 2008.

We talk about Elliott Wave patterns in the main FX, commodities, and DJIA markets. Feel free to register and join me in the US Opening Bell webinars to discuss the markets and patterns. The timing and locations of the webinars are listed on the registration page. Register and join here.

Gold Prices Longer Term Corrective Pattern

Can Gold Prices Rally with Fed Raising Rates?  Patterns Think So

Created using TradingView

Suggested Reading:

Will the Dow Jones Industrial Average Sell Off Continue Today?

2 Elliott Wave Pattern Possibilities on EUR/USD

---Written by Jeremy Wagner, Head Trading Instructor, DailyFX EDU

Follow me on Twitter at @JWagnerFXTrader .

See Jeremy’s recent articles at his Bio Page.

To receive additional articles from Jeremy via email, join Jeremy’s distribution list.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES