Will Jerome Powell have to go full 'Volcker' ?
We mentioned last week that we thought it might take a Jerome Powell "more hawkish than is currently expected" to break gold down from its two-year major support. The FED received an impetus to perhaps"shock" markets with a hawkish tone at its upcoming September meeting by way of hotter-than-expected core inflation data released yesterday.
The below is a very speculative look at what may be in store for gold should major support at $1650-85 break down and a cascade-like sell-off occur. Notice that the weekly stochastic RSI failed to turn all the way back up into the overbought area, with the next Fed meeting as a quickly approaching catalyst. We are not saying that gold will break down; we are simply imagining possible scenarios based on evolving market conditions and technicals.
*Note that in the most bearish case this trader can currently imagine, lows are well higher than that of December 2015.Follow J_GidaroDasilva [email protected] www.kitco.com
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