Gold: October 2013 Forecast

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By: DailyForex.com

The gold markets have had a fairly strong bounce recently, mainly because of the Federal Reserve and its decision to hold off on tapering. The markets were a bit taken back by that, but since then we have seen other questions asked about the economy, so at this point- the gold markets are going to be bumpy to say the least.

The gold markets have turned into something beyond the “anti-dollar” markets over the last few years. In a way, gold has become a separate currency, and as a result the market tends to react to all currencies out there at the same time. With that being said, if there is a lot of easing in the world, gold does quite well as a general rule.

$1400

I think the $1400 level is going to be crucial going forward. This area has been both resistive and supportive, so it certainly makes sense. Unfortunately, the headlines are going to continue to push this market around. The fact that the Fed didn’t taper hurt the Dollar at first, driving this market higher. However, traders are now wondering if the global economy isn’t worse off than anticipated. In other words, and let me know if you’ve heard this before – there is a lot of confusion!

The market looks like it is ready to fall for the moment, and because of this I suspect that we will fall into the month of October. However, the $1200 level should offer support, and because of this, the market should continue to consolidate between $1200 and $1400 in the near-term. Longer term predictions are going to be very hard at this point. I suspect that the market will eventually break out to the upside and above $1400, but not for a few months. I would even guess probably into 2014 at this point.

Remember to play the range, and to keep the stops tight. I think that options markets could be a nice alternative as well, as breaking this range seems highly unlikely.

Gold- Weekly 92313

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.