Precious Metals: What Could Send Gold Prices Lower?

What Could Send Gold Prices Lower?

If you are bullish on the gold markets and you are actively involved in positions then it is absolutely critical that you be on the lookout for market scenarios that could lead to lower prices in gold.  This is because you will need some sort of means to identify situations where you should close out your positions before there are any major market moves against you.  

Profits and losses should benefit from this type of mindset, so it is absolutely critical that you remain watchful for potentially adversarial events.  One factor that could send gold prices lower would be an aggressive interest rate increase from the Federal Reserve.  This is something that should be understood by any gold investor, as there are several ways that higher interest rates would impact the value of gold.

Watching the Forex Markets

In some cases, it can be difficult to forecast what the Federal Reserve is likely to do in terms of changing interest rate policy.  So one of the most sure-fire ways of accomplishing this is to watch for economic data that is released to forex markets.  This is most of the same information that is used by the Fed in order to determine whether or not the country’s economy could withstand aggressive interest rate increases.  

Forex is all about macroeconomics, and this is always going to be news information that is highly valuable for anyone trading in the precious metals.  It is easy to receive all of this information when you use a Swiss forex broker and one of the best in the business is CornerTrader.  This is a trading company that offers access to forex, stocks, options, futures from their online platforms so it is clear that CornerTrader is one of the most versatile brokers in the industry.

Potential Gold Sales

Higher interest rates from the Fed would likely lead to aggressive sales in gold markets.  This is based largely on the expectation that investors will begin to flock to higher yielding assets, and this is not a category that includes gold assets.  For these reasons, we could start to see more buying activity in areas like dividend stocks and currencies and we could start to see more selling activity in areas like gold and silver.  So going forward, it will continue to be important for gold investors to monitor these areas as a means for determining where gold prices are likely headed next.