What kind of FOMC week would it be without some gold obsession in the headlines of the mainstream media?
Gold may drop to $1,200 an ounce, possibly breaching the key support level, thanks to a resurgent U.S. dollar and higher Treasury yields on expectations that the U.S. Federal Reserve could signal tighter policy this week, CNBC’s latest survey of strategists, analysts and traders shows.
“In the shorter term I believe gold tests $1,200, trades as low as $1,190 or so, after which the bargain-hunters will come in and move the price back to the $1,240 to $1,250 level,” said Anthony Grisanti, President of GRZ Energy in a September 15 commentary. “Geopolitical has been quiet and all major economies are easing one way or another. And that makes the Greenback the strongest buck on the block. My bias for gold is lower.”
Oh, says Anthony Grisanti. Okay. Well even just mentioning “geopolitical” disqualifies Mr. Grisanti because it has nothing to do with gold. But for the sake of argument, gold has already lost support per this alternate chart I am using due to stockcharts.com being on the fritz this morning.
See that low at a nice, crisp 1240? That was a loss of support. Before that gold dumped out of a Symmetrical Triangle, targeting below 1200. I am flying naked here without stockcharts.com, but I don’t recall any notable support at 1200. The strategist wouldn’t be talking about ’round number’ support just to fill some headlines on FOMC week, would he?