Market News
Watch These 3 Key Indicators for Gold
Gold has successfully broken out as it closed the month and quarter well past 6-year resistance. It also confirmed the breakout when priced against foreign currencies.
With that said, there are important indicators we can watch to help us monitor Gold’s health and the sustainability of this move.
Sure, we can watch the Gold price every day but other indicators will speak to the underlying health of the market.
With that said, here are three things you should watch.
The first is Federal Reserve policy.
This recent strength was driven by a fundamental catalyst, which we had written about for nearly 18 months: a shift in Fed policy.
Gold stocks often bottom with an end to rate hikes and then they begin to launch higher as the Fed begins rate cuts. Over the past 65 years and in 11 of 13 rate cut cycles the gold stocks averaged a return of 172% with a median gain of over 100%.
So far things are on script. But we have to continue to anticipate Fed policy as only one rate cut appears to be priced in. Gold should continue to move higher if the Fed cuts rates multiple times.
The second key indicator to watch is the yield curve.
