Will the Gold Momentum Stop, or is it Just Taking Some Air?

If we will look at the charts, we can see support at 1224-1232+_, gold rate should keep above those levels to confirm more upside, fall through could take it to the next support level of 1180-1190. Gold rate also is expected to find its first resistance at 1262, and a rise through could take it to the next resistance level of 1286-1298.

In my opinion we would probably see the gold rate at least at 1224-1232 area for test, if not at a low level, such as 1180-1190.

Unstained policy makers recognized a month ago there were dangers to the U.S. economy and proposed two more rate increments this year. That was just half what they thought when they fixed strategy without precedent for 10 years, toward the end of last year.

The U.S. economy is on pace for development of 2.5% through the span of 2016, said Charles Evans, president of the Federal Reserve Bank of Chicago, talking in London on Monday. “The most critical key is the change of work prospects. The U.S. work market has been solid for a long while”.

The next fed decision Federal Funds Rate will be at the 15.6.2016, so I do not expect to see some big changes before that. Also, as I’ve mentioned in my last post on the dollar index, we need to wait and see what will happen at the 95-96 area.

From a quick review of the COT table, we can see: swap dealer Short positions increased while Managed Money long positions increased so we need to see who has the upper hand or who will break first, on the last round that occurs (same behaving COT position) we saw the Managed Money loose, well let’s see what will be the result this time. My bet is on lower side – see more deeps in the gold rate, the positive view for the gold rate is that  gold open interest rose to more than 500,000K contracts – we didn’t saw such amount since 2011.

Another commodity that wasn’t talked about for a long time is the platinum metal. From a technical analysis on the platinum we see also the same behavior – reached to test the lower bands at 1080 area and could not successes to break this level up.