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Auxusd

Pennant - Thoughts on road ahead for gold?Possible long trade to 1478-1523 area. We seem to currently be at the pivotal moment for gold. Either a breakdown or continuation will happen, depending on market sentiment, inflation and the Fed's decisions. My thoughts: If inflation picks up, gold is a popular hedge against it. This could mean gold prices move up. However, higher inflation lowers expectations of a rate cut. If there is no rate cut, gold is less attractive. Gold performs well if there is fears of a recession and a stock market crash. Fed chair Powell is hinting that a preventative rate cut could be on the table in July, lowering fears of a recession. I think expectations about the Fed's decision are more important for gold than inflation itself, meaning if inflation picks up the lowered expectations for a cut would outweigh the inflation hedge argument, sending gold lower. Since the Fed is hinting at a rate cut, I favor the bullish argument in the shorter term. In the longer term, stronger economic growth and a rising stock market following the cut could encourage risk-on sentiment, sending gold lower again. What do you guys think? I would love to hear your thoughts on gold going forward, so please leave a comment and contribute to the discussion!
TVC:GOLDLong
by bjohel
2