Gold Price Pre-Fed Update

Tuesday, December 18, 2018

gold bars

The next 72-hours are critical. It seems nearly every market is at a significant tipping point. Tomorrow’s Fed decision will either extend or reverse the current trends. Expect increased volatility.

Gold Prices

It looks like gold prices are trying to break higher from the small bull flag. Resistance coordinates between $1258 – $1270. If we are going to see a top within the next 72-hours, it should appear among those numbers. Finishing the week above $1270 would extend the rally and support a test of $1300 – $1310 by year-end. That would likely be the result of an overly accommodating Fed.

gold continuous contract chart

Silver Prices

Silver prices remain within the 4-month range. As I said, it’s been best to sell breakouts and buy breakdowns in silver over the last year. I don’t think that has changed. Consequently, a spike above $15.00 after the Fed announcement could turn out to be another trap. I’d need to see a sustained breakout above the 200-day MA to convince me of a renewed bull phase. A breakout above $15.00 that slips and closes back below $14.80 would become an opportunity to short.

GDX

Miners made new closing highs on decent volume. Prices are very close to vital resistance. I was a little surprised by yesterday’s strength. It was probably due to weakness and new lows in the general stock market, but I can’t rule out front-running. Front-running is when traders get wind of a significant change or outcome and begin buying before the announcement. The next three trading days are crucial.

GDXJ

Volume picked up, and juniors finished 3.53% higher. I can’t tell if this is traders front-running the Fed or safe-haven capital. We should know by Friday.

US Dollar

It seems every market is entering the Fed meeting at a significant crossroad. The dollar created an ascending triangle over the last several weeks and prices will either break higher or lower depending on the Fed.

SPY

Stocks are very close to the long-term trendline as well as prior support. If prices breach the trendline (probable), I’ll watch for an undercut of the February low. Support resides between 247 – 252.

Volatility should wane, and we should know where prices are headed by Friday. Watch out for false moves.

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AG Thornson

AG is an accredited CMT through the MTA and the editor of GoldPredict.com. His members receive daily updates and regularly scheduled reports 3-days a week. He prides himself on making his analysis easy to understand through the use of adaptive and creative charting methods. You can reach AG at info@GoldPredict.com.