With a gigantic event for gold coming next week, we expect to see the metal stay in a range over the next few days. But if gold somehow falls below $1,352, it could mean big trouble for it..
Gold used a disappointing employment report on Friday to trade $25 from its low on Friday morning, and to reach a high of $1,393.60—just shy of resistance at $1,395.20. Meanwhile, on the downside, Friday's low of $1358.20 kept gold away from the $1,352 make-or-break line in the sand.
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As we head into this week, the major focus is the FOMC meeting that begins a week from Tuesday. After all, it is the announcement from this meeting (which we will get on Wednesday, Sept. 18) that will finally give us some clarity on when the Federal Reserve will begin to taper its easing program, and by how much.
Ahead of this event, we are looking for the market to stay range-bound into next week, and we will continue to trade the levels.
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The lowest marked close last week was $1,373, and we believe this brings the $1,373 to $1,401 range back into play. Only the unlikely event of a close outside of this range will provide the market with momentum in either direction.
Furthermore, it will take a close above $1,422.30 to spark a bull leg up to $1,480. And if we see a close below that key $1,352 level, it will spark a bear leg down to $1,300.