Gold forecast medium term

Gold prices are trading at 1311$ but it seems xau/usd is in no mood to give any easy gains to traders . Its trading in very choppy range since last 2 weeks and still giving false breakouts . Currently charts are in negative but we are taking a contra view . We feel gold price should test 1350$ to 1400$ in upcoming months while downside may be cap till 1275$ or 1250$ .

FOMC meeting

Tomorrow we have FOMC meeting when new chairman powell will announce policy for first time . Fed already cleared that we should expect 3 hikes this year and its very possible we see first 25bps high tomorrow only increasing band from 1.50% to 1.75% . But another event is Friday when another round of shutdown is due . US govt may opt to increase the ceiling of debt but this would be the first time President Trump would have his say on this and he may surprise the market .

Many bond analyst have raised their estimate from 3 to 4 hikes this year and if we face 4 hikes then there would be good selling in equities . Major selling in equity should open door for gold upside as investors find it safe haven .

Technically gold prices have been testing 1307$ – 1303$ range since weeks and buyers are cashing this opportunity to buy major positions on lower levels . So if 1300$ is safe then a good small 8-10$ buy should not be a problem for 1350$ and 1400$ for upcoming weeks . Below 1298$ we should be looking for 1275$ .

We already cleared in our yearly forecast that we expect 1400$ to 1500$ price this year . You may read our yearly forecast here

World Equity market

World equities markets are on lifetime high while not a single country is delivering that kind of growth in GDP numbers . US has delivered 30-40% returns in 2017 so 2018 could be real bumpy and investor may find time to book profits this year and may swipe equity to gold .

Crude oil prices also recovered almost 50% from its last year low of 40$ and trading pretty firm which is not a good signs for most of world economies . Crude oil will play a major role in gold price as its tend to go higher .

In short we expect gold to hit 1400$ to 1500$ this year . We are bullish in medium term trend .

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