FED Teases with Looser Policy, Prices explode.

FED Chair Powell surprised everyone this week, announcing that the US will most likely cut rates as early as March next year.

And not just one rate cut. The FED is factoring in 3 rate cuts through 2024. 

While sharemarkets reacted as expected (exploding upwards), Gold also joined the party and is now consolidating around US$2030 at time of writing.

So we now have two very clear positions - both are correct and just need time to see the true picture unfold.

1. The economy is fine and recovering as planned. The FED is now ready to reduce rates and move policy back to how it has been during the last decade. Party on!
2. The economy is not fine and the FED needs to reduce rates to ensure it doesn’t fall into recession.

While the majority of sharemarket investors have been eagerly awaiting any dovish signals from the FED, hoping to drive share prices up further - the exact thing that they are wishing for could ultimately cause the downfall of the sharemarket. If the economy is indeed ‘not fine’, overpriced shares in an underperforming economy are a recipe for disaster. Take a peak at today’s RSI for the ASX200 and SP500 chart for perspective.

And Gold knows this. 

Enjoy today’s charts and forecast.

Gold daily chart, with 200MDA

Silver daily chart, with 200MDA

ASX200, with 200MDA

US500, with 200MDA

Gold Futures Technical Analysis

Gold Futures monthly analysis continues to recommend a STRONG BUY with Weekly analysis a STRONG BUY signal.

Technical indicators - Monthly Projections

Summary for Monthly forecast: Strong Buy

Disclaimer

This news and any links provided are for general information only and should not be taken as constituting professional advice from Jaggards. Jaggards is not a financial adviser. We recommend you seek independent financial advice before making any financial decisions based on the information contained in this article.