Affiliate Disclosure
Affiliate Disclosure DailyForex.com adheres to strict guidelines to preserve editorial integrity to help you make decisions with confidence. Some of the reviews and content we feature on this site are supported by affiliate partnerships from which this website may receive money. This may impact how, where and which companies / services we review and write about. Our team of experts work to continually re-evaluate the reviews and information we provide on all the top Forex / CFD brokerages featured here. Our research focuses heavily on the broker’s custody of client deposits and the breadth of its client offering. Safety is evaluated by quality and length of the broker's track record, plus the scope of regulatory standing. Major factors in determining the quality of a broker’s offer include the cost of trading, the range of instruments available to trade, and general ease of use regarding execution and market information.

Gold Forecast: Continues to Rally as Fed Cuts 50 Basis Points

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
  • The first thing I see is that we had broken out to the upside, especially as the Federal Reserve had cut interest rates by 50 basis points in the afternoon.
  • That being said, there are a lot of questions as to what this means, because while the market is looking at the interest rate cut as a potential positive, the reality is that the market also could look at this through the prism of a potentially negative turn of events, because they will ask the question “What does the Federal Reserve know and believe is going to happen next?”

Gold Forecast Today- 19/09: Rally After Fed Rate Cut (Chart)

After all, this is a pretty aggressive rate cut, especially considering that the economy is “fine”, and with that being the case, it could make a lot of sense that we would see traders start to question whether or not they are worried at the Federal Reserve. We have seen this play out before, when the interest rate cut was a little hotter than anticipated, generally at the point of major concern when there are questions about whether or not the economy is about to enter a major recession.

Top Forex Brokers

1
Get Started 74% of retail CFD accounts lose money Read Review

Technical Analysis

I certainly believe that gold is more positive than negative, and I also recognize that it needs to pullback a bit in order to offer value. Perhaps it has already done that during the session after the initial “knee-jerk reaction” to the upside, but ultimately, I think this is a situation where at the very least we need to go sideways in the short term, perhaps even pull back in order to offer enough value worth taking risks with. I certainly would not short this market, it is far too strong, and I do believe that it is probably only a matter of time before we break well above the $2600 level.

Furthermore, the Bank of England has an interest rate decision on Thursday, and of course the Bank of Japan has an interest rate decision coming out on Friday. In other words, there are plenty of central banks out there that could continue to cut rates, driving hard assets higher.

Ready to trade our Forex daily analysis and predictions? We’ve made a list of the best Gold trading platforms worth trading with. 

Christopher Lewis
About Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
 

Most Visited Forex Broker Reviews