Gold Forecast: Continues to Show Strength
You can see just how influential it had been previously, as we fell during most of the year.
- Gold markets rallied a bit during the trading session on Thursday, but you need to keep in mind that it was Thanksgiving.
- In other words, liquidity would have been a major issue, and of course, you must worry about the fact that there were only limited hours of futures trading.
- In other words, there’s not a whole lot to go on other than the way the market has been behaving over the last couple of days.
Keep in mind that the FOMC Meeting Minutes came out late on Wednesday, they suggested that some of the Federal Reserve governors are starting to think about slowing down raising rates, this might be all it takes to get gold going higher. The 200-Day EMA sits right around where we are right now, so if we can break above that handily, it will have a lot of algorithm-based traders buying. At this point, you can also look at the $1800 level as a potential target, and anything above there almost certainly opens up the possibility of a move to the $2000 level.
We May See Strenght in the Gold Market
Underneath, there is a significant amount of support near the $1725 level, and then again at the 50-Day EMA. The 50-Day EMA is an indicator that a lot of people will be paying attention to because it is quite often followed as a bit of a trendline. You can see just how influential it had been previously, as we fell during most of the year. At this point, we must ask whether or not gold has bottomed, and from a technical analysis standpoint, you could make that argument.
After all, there is a “W pattern” that has just kicked off, and we are back above the crucial $1680 level, an area that has been important multiple times through the years and was at the bottom of the overall consolidation area. We broke down through it but could not pick up enough momentum to truly break down cold so one has to wonder whether we have at the very least a correction coming, if not a complete trend change. A lot will ride on what the Federal Reserve has to say in December, but between now and then we may see a bit of strength in the gold market, as interest rates continue to drift lower.
WTI Crude Oil Forecast: Continues to Threaten Support
We are on the precipice of either forming a massive double bottom or sending this market even lower over the next couple of weeks.
- The WTI Crude Oil market has done very little during thin Thanksgiving trading on Thursday.
- This is a market that obviously had limited volume, as well as limited hours to move. Because of this, it’s not a huge surprise to see the market to simply sit still.
- We are sitting on top of a major support level, so if we were to break down below the hammer on Monday, that opens up a flood of selling from what I can tell.
Looking at this chart, break down below that level could send the WTI market down to the $75 level, perhaps even down to the $72.50 level. The market obviously is starting to focus more on demand, or perhaps better put, demand destruction. If we continue to see a lot of negativity in the overall global economy, it does make a certain amount of sense that we would see this market drop, as oil is considered to be the “lifeblood” of the global economy. It’s worth noting that freight numbers are starting to drop, meaning that the demand is continuing to fall through the floor.
Market Could Go Lower
If we turn around and rally, the market could break above the nasty candlestick on Thursday, opening up the possibility of a move toward the 50-Day EMA. The market will almost certainly see a lot of noise in general, but I think that move will more likely than not run out of momentum given enough time. It’s a bit of irony at this point, as stocks look ready to break out, but oil still looks very vulnerable. The markets will open again on Friday, but it will be limited as well, not only due to the hours in the futures market but the fact because most of the big oil houses in the United States won’t even be trading.
It is because of this I think you need to pay more attention to the Monday candlestick than anything else, as it could give you a bit of a “heads up” as to whether or not we are going to get a bounce, or if we are finally getting ready to break down more significantly. We are on the precipice of either forming a massive double bottom or sending this market even lower over the next couple of weeks.
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