Happy New Year 2017 to you all and we hope that you did have a great celebration.
Back to the markets today with some thoughts on Gold .
Gold lost its upward momentum since last Aug 2016 due to some important fundamental decisions last year like Fed rate hike, president-ship election in the USA with some very impressive decisions and promises by Fed and elected president Trump. As results, we have seen that all of those events have been priced in the prices a period before ( some months). Now the coming events in the US have also been priced in the price of Gold again, only differ in the context, and a quite lager swing has gold made and pulled back from 1126. xx to the current trading spot price at 1178. xx , so more than 50 USD/ounce; quite impressive, because the market is waiting for the action of the new US setup cabinet by elected president Donald Trump how they will operate the country business in the coming months, will Fed really hike the rate at least 3 times this year?
To map out such kind of coming events, we make a short interpret that in case Trump's cabinet operates the businesses smoothly with their bilateral politics with some important economical countries, then Fed is being pushed to hike the rate. In case Trump's cabinet will be being in confrontation with the world economies and politics due to their political strategy, then pumping the money (USD) into the markets is a must for USA and rate hike will be very unlikely to realize this year at least.
To our technical point of view, the very important upside level for Gold has to be above 1200.xx/ounce, then we will think for a upward trend further. Below 1200. xx will still be as a corrective phase, in which the price just needs to be retraced for some.
The Price levels are depicted on the chart with lines and . Green trend lines= the prices are/were in a upward channel; red lines= the prices were/are in a . Green rectangles are the fibs zone for a valid retracements of 4th wave in a downward trend. The red-orange coss lines are our supposed upward channel, in case the price reads the upward side and join that channel. Orange rectangles are the earlier price zone but they are also the levels for the 5th wave.