Gold Prices: Has the Rate-Hike Rally Run its Course?

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• Gold Technical Strategy: Intermediate-term: bullish, near-term: congested.


• Gold prices have continued to volley around the $1,250 level; and this can open the door to both bullish and bearish approaches.


• If you’re looking for trading ideas, check out our Trading Guides. If you’re looking for ideas more short-term in nature, please check out our Speculative Sentiment Index Indicator (SSI).

In our last article, we looked at Gold prices after an aggressively-bullish rally had driven price action up to a key resistance level around $1,250. And this came after a tumultuous three weeks in Gold prices: As we came-in to March, Gold prices drove-lower on the anticipation of a rate hike from the Federal Reserve, falling from a high of $1,263 all the way-below a key zone of support around the $1,200-level. But as the Fed hiked rates, they did so with an abundance of caution; electing not to upgrade rate forecasts going out to the end of 2016, and the apparent takeaway was one of disappointment as the U.S. Dollar put in a bearish reversal, and Gold prices shot higher. Just a week later and we were back at $1,250.

Chart prepared by James Stanley

But in the week since, buyers have been able to stoke significant continuation in that bullish trend. For those with longer-term outlooks, bearish positions may be favored as near-term price action has been unable to take out that prior February-high, and the current stall at this ‘lower-high’ may be indicating a reversal around-the-corner:

Chart prepared by James Stanley

The shorter-term setup, however, could be negotiated in a bullish manner; and for those looking to gain short-USD exposure or for Gold bulls, there’s a setup here that can be worked with on the hourly chart under the presumption that this $1,250 zone of resistance is taking some time to resolve before the bullish move may continue-higher.

Chart prepared by James Stanley

--- Written by James Stanley, Strategist for DailyFX.com

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Gold Prices: Has the Rate-Hike Rally Run its Course?
Gold Prices: Has the Rate-Hike Rally Run its Course?
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