SHORT TO 1,778 AND LONG TO 1850 for TVC:GOLD by Gold_Professional_Sniper

Gold has broken my trend line to the down-side following three consecutive days of a negative move for the safe-haven metal. It follows that there is now a possibility for further weakness in gold towards the next relevant support around $1,778-76 region. Gold , however, denotes a present technical possibility of head and shoulders bottoms in Gold at $1750

Tomorrow we will have the ECB Meeting which will deliver its speech on their interest rate decision. Inflation has already peaked in Europe and to curb this inflation rate, the ECB might have recourse to tapering on the European side.

If inflation is high and rising, the European government may increase interest rates in order to control it. This will have the effect of

• Reducing aggregate demand in the economy – people will spend less because they have to pay higher interest interest on loans.

• Increasing the cost of financing for companies.

• Strengthening domestic currency as a result of higher interest rates – this may mean that exporters are forced to cut their prices and imports will be cheaper. A hawkish ECB will boost the EURO and the USD might fall which in turn will be favourable to gold to attain its resistance levels at $ 1,823.6, $ 1,836.20 and $ 1,850.

On the american side, U.S. Treasury Secretary Janet Yellen on Wednesday again urged Congress to tackle the nation’s debt ceiling, saying it was unclear how long Treasury’s efforts to temporarily finance the U.S. government would last and citing ongoing economic worries over the pandemic.

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