XULF Report
Just as a broken music record repeats the same line over and over again I’m going to repeat much of the same analysis from last week as the market remains range bound. The focus this week is on the FOMC’s press conference where traders will be attentive listening for clues as to when the Fed intends to wind down asset purchases and which conditions warrant the slowdown. Gold is really battling against the bearish setting of improving US growth, the prospect of reducing stimulus and low inflation and is showing great tenacity to be holding levels just under $1400. Often when bad news fails to push a market any further down it is a sign the market is ready for recovery however there have been a few occasions since April’s fall when that spark quickly faded therefore it looks like gold needs more than a technical correction.
While the market remains in an indecisive mode and trades around its new found equilibrium around $1390 look to trade at short term support and resistance levels. Simply buy at green support and sell at yellow resistance lines to steal a few dollars of profit. When using this tactic be very mindful of scheduled economic data and press conferences that can catch out the amateur trader and always use a stop loss. The main data due out today is the Empire State Manufacturing Index at 13:30 GMT which will further insight into America’s manufacturing sector and clues on the health of the economy.
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