Why Gold Can Still Rally In The Face Of The Fed [Freeport-McMoRan Copper & Gold Inc.(NYSE:FCX), Newmont Mining Corp(NYSE:NEM)]

gold1300X600As the economy shows signs of improvement and as the U.S. dollar gets stronger, should now be the time to get out of gold? Since Thursday’s stronger-than-expected jobs report, the dollar has rallied and gold has fallen nearly one percent. But some traders don’t think it’s time to hit the sell button just yet.

“I don’t think gold is a sell,” said Richard Ross, global technical strategist at Auerbach Grayson. “Neither is it a high-conviction buy though, by virtue of this relatively range-bound sideways chart that we’ve had for over the last year now.” Gold has traded in a range roughly between $1,180 and $1,400 since the latter half of 2013. “This is a very range-bound, choppy, sideways chart,” said Ross, a “Talking Numbers” contributor.

Ross’ long-term chart of gold shows bullion as coming up against resistance from a downtrend begun in 2012, when the metal traded at $1,798 per ounce. It subsequently broke down below its 200-week moving average in early 2013. “We have a well-defined trend in place,” Ross said. “Absent a break above or below that trading range, it’s very difficult to be a high-conviction buyer or seller of gold.”

You can see the full “Talking Numbers” segment below:

Related: SPDR Gold Trust (ETF)(NYSEARCA:GLD), Newmont Mining Corp(NYSE:NEM), Freeport-McMoRan Copper & Gold Inc.(NYSE:FCX)

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