Gold Sets Long Term Pattern Due to Fed's Policy Move
NEW YORK ( TheStreet) -- Gold is setting up in a long term pattern, to either move higher or lower, based on the Federal Reserve's next policy move.
The chart below shows SPDR Gold Shares (GLD) forming a strong head-and-shoulder's pattern over the past year.
In May, the Fed hinted at winding down stimulus heading into next year.
The stimulus has affected gold by decreasing interest rates, which puts selling pressure on the U.S. dollar. The dollar and gold trade inversely, which means a weaker dollar puts a bid higher in gold prices.Since that time expectations of tapering have changed sporadically, from as early as this past September all the way out into next summer.
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