Gold Price – Fundamental vs Technical Analysis

London (Dec 10)  Fundamental Analysis -- The gold play is very tricky, because it is not entirely dependent on this element that if the Fed will increase the rate, the dollar will become stronger and the yellow metal will move lower. The fresh rout in commodity space has increased the overall volatility in the market, which has given a birth to this idea that perhaps, the Fed may delay their rate decision and let the dust settle before they intervene. Nonetheless, if they Fed does increase the rate next week, this will lift the volatility in the market, especially in the emerging market. Gold represents a better solution if you want to hedge your bets, hence, we are experiencing this consolidation.

Technical Analysis -- In terms of technical analysis, the recent upward move is challenging its downward trend line. The price is trading above the 50 and 100 day moving averages (shown in red and yellow color respectively), it shows that bulls are in control of the price. However, the MACD indicator is showing that the upward move does not have much momentum behind this, therefore, the bulls could lose their control.