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    JM Bullion Weekly Market Review (9/11/15)

    Gold is moving lower today and testing the $1100 per ounce level. Stocks are slightly higher, while crude oil and the dollar index are both weaker.

    Gold may potentially be seeing weakness today on technical trade and sell stops. A close below the $1100 level may potentially encourage more short sellers to enter the market. Gold has been moving lower the last two weeks or so since making a run up the $1170 area as risk aversion took hold.

    Unfortunately for the gold bulls, the path of least resistance remains lower. Any rallies in gold will likely-for-now be sold into until proven otherwise. With the recent lows around the $1080 level, within striking distance for the bears, one has to wonder if gold is setting up for a new, fresh leg lower in price.

    Gold has a number of issues still weighing on the market. From a technical standpoint, the gold chart has looked better. Recent equity market volatility appears to have subsided to a large degree, and investors seem to be fairly hungry for risk once again. Add to that the ongoing uncertainty of what the Fed may or may not do next week and you have some compelling reasons for gold to remain under pressure.

    On the other hand, however, more will likely be known about the Fed’s plans regarding interest rates in the next week. With the uncertainty removed from the equation, investors may seek to buy or sell gold regardless of whether or not the Fed does raise rates next week. In other words, the market will likely tip its hand soon and could potentially make a significant directional move one way or the other.

    While gold could potentially rally, the market could also potentially see significant selling that could potentially take prices to sub $1000 per ounce levels.

    The stock market may hold the key to gold’s near-term fortunes or lack thereof. If stocks continue to stabilize and volatility continues to contract, the Fed may be more comfortable raising rates. On the other hand, if the market sees further volatility and selling pressure, the Fed may elect to hold off until December or even beyond.

    In that case, increased risk aversion along with the Fed holding off on raising rates could potentially spark a rally in the yellow metal.

    Heading into next week’s FOMC meeting, gold and other markets may be somewhat quiet until the release of the Fed’s decision. Some volatility could be seen heading into it, however, as position squaring takes place ahead of what could potentially be a big market-moving event.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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