Gold ready for breakout to the upside

The gold price has certainly behaved strangely this week, failing to react to news which would usually send the precious metal considerably higher. In fact after North Korea launched another missile on Tuesday (A missile capable of hitting anywhere on the US mainland) gold actually fell and even Donald Trump’s statement after the launch that “We will take care of that situation.” Didn’t help either.

It seems as if the market is preparing to overlook significant events which would usually trigger a rally in gold which is why it has remained largely range bound between $1,270 and $1,300 for the best part of 2 months, making it one of the tightest trading ranges of the last decade.

The good news for gold is that it has also held up well against news that would usually push it lower including an expected rate hike from the US Federal Reserve next month as well as proposed tax reforms in the US which are likely to get the go ahead from the US senate this week.

As we approach the end of the year, and news such as rate hikes and tax reforms already priced into gold, some predict this tight trading range is bound to end and gold is poised to break out to the upside.

 “It’s been eerily quiet in the gold and silver markets over the past few months. A breakout could happen as we approach this Fed meeting,” noted Michael Dudas from Vertical Research

“With this low volatility, an event can spark a move either way. We think gold is going higher” he added.

The material published in on this page is produced by the FIBO group companies, and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Analyst

The world of trading has no boundaries

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 58% of retail investor accounts lose money when trading CFDs with this broker. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

IMPORTANT: Please be informed, that our services are available for Professional Clients only. Our website is currently under review for the implementation of the correspondent amendments.

Important notice
By clicking "Continue" you will be redirected to the website operated by FIBO Group, LTD company registered in BVI and regulated by FSC. Please familiarize yourself with the Customer Agreement through the link. Click "Cancel" to remain on this page.