By FXEmpire.com
The gold markets fell hard on Tuesday as the Federal Reserve released the minutes of their previous meeting. Much to the chagrin of many traders, the mention of quantitative easing wasn’t in it, and this suggests that the Federal Reserve will be on hold as far as interest rates go. There are many in the market that thought that the Fed may ease a bit more, but the central bank seems to think that there is a real chance that the economy in the US can support itself.
The $1,640 level is being tested again, and with this latest development we are officially neutral of gold for the moment – something we haven’t been able to say for quite some time now. The market can’t be bought with the Tuesday candle closing at the very lows of the session, and sitting right on the support level.
If the level gives way, there is a good chance that we will see $1,600 tested as support in relatively short order. The real area that we see as a “floor” in this market is the $1,500 level since it giving way would end up being a significant event. Because of the longer-term uptrend in the gold markets, we won’t be participating in any selloffs until we get below the $1,500 level, and will simply wait to see if there are signs of support at other handles.
The market could be choppy in the near term, and as long as that is the case, we are flat. If the market can sustain this area for a few daily candles, we would also consider buying this market as well. However, we need to watch the Dollar overall, and as long as it continues to gain overall, this market will underperform. However, in the long run – we think it will bounce back. After all, the central banks are simply far too easy at this point in order for the markets not to want some kind of other currency. In the meantime, we simply sit here and wait to see supportive candles – or at least a sideways grind to show us the bulls haven’t given up.
Gold Forecast April 4, 2012, Technical Analysis
Originally posted here
