-- Published: Thursday, 10 March 2016 | Print | Disqus
Gold reversed sharply after the European Central Bank (ECB) press conference held by Mario Draghi, the ECB president.
In the conference Mr. Draghi laid out strong stimulus plan to get the Eurozone on the road to inflation. The plan called for inflation to get up to 1.8% by 2018. Certainly not a runaway number but way better than zero.
The morning started out with gold breaking as the US Dollar rallied against a failing Eurocurrency. Things stayed that way right into the press conference. During the question and answer period, Mr. Draghi errored in my opinion when he implied that the ECB was through cutting interest rates.
One thing a central banker should do is keep pressure on markets by implying there's always more ammunition left to influence things. You don't say anything at a major event you haven't thought out carefully as the world of currency traders is hanging on every word as are the algos that high frequency traders use. One he said this, the market turned on a dime and began a relentless rally, culminating in a rally of nearly 400 points from the break low until he blundered.
Gold rallied in part because the Dollar broke sharply against the rising Euro and because the scope of the stimulus program he put forth is one designed to create inflation.
The chart below tells the rest of the story.
The PriceCounts shown above are provided through QT Info Systems.
The QT PriceCount Study is a technical indicator exclusive to QT Charts. What this exclusive study attempts to do is project the distance of a move in price. PriceCounts are not intended to be an "exact science" but rather offer a target for various objectives based off the first leg of a price move. Each chart will have the "initial leg" which sets up the PriceCount displayed as two parallel lines on the chart above.
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-- Published: Thursday, 10 March 2016 | E-Mail | Print | Source: GoldSeek.com