The gold price hesitates ahead of the $1,800 level as investors wait for the NFP report to be released in the last trading day of the week. At this point, both bulls and bears may have a case, as the market formed either a double top or an ascending triangle at the current levels. In other words, more price action is needed before taking a position.
Janet Yellen, the US Treasury Secretary, spooked financial markets yesterday as she hinted that the Fed would likely lift the rates sooner than the market expects. Her reasoning was that the Fed would not hesitate in lifting the rates, should we see rising inflation in the months ahead.
The markets, naturally, tanked on the news. The Dow Jones index dived a few hundred points, but it quickly recovered as investors bought the dip.
The idea behind Yellen’s words is that inflation is coming in the months ahead. Because gold is the typical hedge against inflation, the bias is bullish, and traders will likely consider the ascending triangle scenario.
Gold Price Technical Analysis
Bulls may want to wait for a daily close above the horizontal resistance before going long. In such a case, a stop-loss order is needed at the lower edge of the triangle, and a risk-reward ratio of 1:3 to set the proper take-profit level.
Don’t miss a beat! Follow us on Telegram and Twitter.
Gold Price Forecast
Follow Mircea on Twitter.