Gold Price Stops on Monthly Range As Fed Outlines Outcome-Based Guidance For Currencies. Gold’s recent uptrend in the stock price is being offset by continued contraction in its gold futures trade, as its price tracks the closing range for September amidst continued discussions for yet another round of US Federal Reserve stimulus, and major economic data forecasts could keep the yellow metal afloat.
With current stock prices at historic highs, analysts are predicting a more than 70% jump in the gold price this week, making it a good time to put some money into the yellow metal. With a strong US dollar and global economic slowdown, the Federal Reserve has made it clear that it expects stronger economic growth and employment. However, this expectation is likely to be tempered with the latest GDP figures out today, which may show a decline in GDP for the fourth quarter of this year.
Although the US economy is expected to fare well in the coming years, the impact will still be felt heavily on the financial markets, which could result in further retrenchment of investment and capital flows, further tightening of financial buffers. Meanwhile, central banks across the world, including the European Central Bank, the People’s Bank of China, the Bank of Japan, and the Bank of Russia, are all expected to maintain their strict rate increases. Despite the recent US Federal Reserve tightening, the Federal Reserve’s policies are expected to be extended until at least the middle of next year, which means that inflation is expected to remain under control at the same time.
The Federal Reserve has already announced two rounds of its controversial, quantitative easing (QE) program, which will see the US Federal funds rate raised three times this year, with additional hikes expected in the months to come. In addition to its QE program, the central bank will be looking to pump trillions of dollars in additional cash into its portfolio to support its balance sheet, while also keeping a close watch on inflation, which is expected to stay under control in the coming years. To prevent the economic situation getting worse, the Federal Reserve will continue to keep a dovish outlook, which could help keep the price of gold high, despite possible weakening economic data.
Achieving a stable gold price is essential to investors and traders who want to avoid making disastrous decisions in gold price movements. While investors may look forward to higher profits in future trading, the recent uptrend in stock prices could make gold more difficult to invest in.
If the stock market keeps on falling, traders should also be prepared for a correction in the price trend, because its range will continue to expand, making it difficult for them to invest in gold. When the stock market falls sharply, investors should take advantage of the upward movement in the gold price by selling stocks and buying up gold, so as to lock in profits when they go down.
If investors and traders plan to buy stocks, they will find gold to be a safe bet because the value of the commodity is expected to appreciate even during periods of bearish market, which means that the gold price is likely to rise even if there is a drop in economic activity. Achieving a long-term profit with the gold exchange rate depends on how investors use the current market conditions. For instance, investors should consider selling before there are a fall and investing in stocks when the market continues to go down, particularly if the market seems set to reverse its uptrend, especially if it follows a downtrend.
To avoid losing money with your investment decisions, investors and traders can also use fundamental and technical indicators to predict when gold prices are about to start turning around or start falling. The gold chart will show trendlines and other trends that signal when the current price is going to turn around. Another useful way to spot the beginning of the turning points is by tracking how the gold price is changing along major market moving averages. However, the real key to achieving consistent gains lies in maintaining the discipline to stick to a strict trading plan.