Gold markets have been all over the place during the trading session on Tuesday as nobody really knows what to do with the statement “we can no longer consider inflation as transitory.” All that could be good for gold longer term, the reality is that everybody ran to the US dollar which of course works against the value of gold. You can see that we are sitting on a major trendline, and we did dipped below it for a while, but at the time of recording we are still sitting on it. What that means is the market has no idea what to do with this new information, so that something that you need to keep in the back of your mind because it can cause a lot of problems for your account if you try to act on it.
Gold Price Predictions Video 01.12.21
Simply put, if we break down below the lows of the day, then I think we go much lower. In fact, we may go much, much lower. On the other hand, if we were to somehow take out the highs of the day, something that I do not necessarily think will be easy to do, then we have much further to go to the upside, perhaps as high as $1875.
Anything or anybody that tells you what you should be doing at this point is simply gambling. Markets will do what they want to, not what they are “supposed to do.” The Tuesday session is a perfect example of this, as a lot of traders will have been sucked into the “inflation is good for gold” narrative, something that has not been true for several years.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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