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.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV