GOLD: Upside Potential To $1256.60 For This Precious Metal
Following last weeks analysis Gold has fallen to find support close to the 1235.00 as expected, for now this level appears quite reactive with a 4-Hourly Bullish engulfing candle rejecting straight off it. A breakout of the counter trend line also seen on the 4-Hourly chart will likely see the push higher for Gold that has been anticipated. Upside targets remain the same with December's high of 1256.60 being first. 1260.00 second in the line of sight then July highs of 1284.00. Gold's recovery on Monday is supported by a weaker Dollar index and rising crude oil prices.
Monday marked the start of a busy trading week with the US Federal Reserve's Open Market Committee (FOMC) meeting on Tuesday and Wednesday to discuss monetary policy. It is widely expected that the Fed will raise interest rates by another 0.25% on Wednesday afternoon.
Also the Chinese Government could announce major new economic activities this week to help stimulate the worlds second largest economy. China's central bank made an unexpected injection of money into its financial system yesterday.
Should Fundamental factors tip Gold in the opposite direction, downside potential if 1235.00 is convincingly broken would first be 1225.00 then 1220.00.
Written by Sam Moore
Instagram - @Moore_fx