Gold prices remain steady despite strong dovish statements by various Fed members yesterday. Instead of rallying up strongly due to lower chance of QE Tapering, prices actually went lower below 1,275 during late US session, only managing to climb back above 1,275 during Asian session. However, we’re back below 1,275 once more, supported meekly by the rising trendline that is in play.
This suggest that Gold traders are bearish, and the mute response to Fed talk suggest that speculators for a non-tapering event may have already over extended themselves, suggesting that the broader bearish fundamentals (e.g. no need for inflation protection, and lower physical demand for gold) is gaining initiative, and may start to drive prices lower whether regardless of December FOMC outcome.
Immediate bearish target would be 1,270, with the recent swing low of 1,261.5 being the next bearish objective. It is hard to imagine prices being able to hit much lower for now as Bearish momentum will definitely be Oversold should price hit 1,261.5 right now. On the other hand, should prices rebound from the trendline, 1,280 will be the bullish target, with high chances of bearish pullback especially if there isn’t any news release that supports higher gold prices.
Weekly Chart remains bearish, but Stochastic suggest that we may not be able to push much lower from where we are right now with momentum already Oversold. However, this does not override the overall bearish outlook, and bearish objectives below 1,250 remain plausible but perhaps not in the immediate future.