The first quarter of 2018 has given very little excitement to those who trade Gold. Prices have been range bound in a tight area around the highs of the early 2016 rally.
There’s some resistance up here, and it seems like the price is waiting for a catalyst to decide what happens next.
It’s entirely possible that the catalyst will be something as simple as sentiment.
As Adam Hamilton has noted in his latest essay Gold mining stocks are struggling for traction. Even though Gold prices are at a high area of the past few years.
Adam comments, “The gold miners’ stocks remain deeply out of favor, trading at prices seen when gold was half or even a quarter of current levels. So many traders assume this small contrarian sector must be really struggling fundamentally. But nothing could be farther from the truth! The major gold miners’ recently-released Q4’17 results prove they are thriving. Their languishing stock prices are the result of irrational herd sentiment.”
Could it be that investor sentiment is holding back Gold prices from continuing to climb?
Sentiment could well be suffering as investors are hesitant on the Fed’s interest rate policy. Interest rates were hiked at the back-end of 2017, and speculators seem to think that the intended range is higher than the 1.5% right now. Maybe at or above 2% is where some commentators think rates are heading.
This, coupled with a volatile stock market, could be why those pesky Gold mining stocks are languishing behind a relatively strong Gold price.
There’s another monetary policy meeting on the horizon, so it will be interesting to see what the comments are. It’s probably the catalyst Gold is waiting for.
From http://www.livecharts.co.uk/livewire/2018/03/gold-stuck-in-rut-for-how-long/
Live Wire Blog 