Hold On, Gold Is Not Done Falling
Hold On, Gold Is Not Done Falling by Danielle Cambone – KitCo News
TDC Note – Well, it was climbing all day on Friday May 4, 2018
The U.S. Federal Reserve is likely to raise rates at their next meeting in June, adding more downward pressure on gold, this according to Phil Streible, senior market analyst at RJO Futures.
“In June, [the Fed] should raise rates again. That’ll probably be another catalyst to put the pressure on. I think for longer-term traders, if you look at the ADX, which measure the strength of the downward trend, it’s at 40, which is a considerably strong downward trending market,” Streible told Kitco News.
The strategist noted that the Fed’s hawkish stance would likely be justified by a healthy U.S. economy, as evidenced by low unemployment numbers.
“We’ve got the unemployment rate at 3.9%, that’s the lowest level we’ve seen in 18 years. That’s going to considerably weigh in on the Fed’s decision on the next go-around,” he said.
Despite this week’s bounce up in gold prices following the FOMC’s decision to keep rates unchanged on Wednesday, Streible said that gold will have a hard time sustaining upward momentum, citing a strong dollar as the main headwind.
“The dollar index has been really weighing on gold, and the dollar broke out from a small consolidation range, and it looks like we can target some of those previous highs of 95 on the dollar,” he said. “The last time it was at that level was last November and gold prices were down at $1,275, so if the dollar continues to rally, I think that’s what’s going to weigh in on gold.”