Gold has shifted gears from extended rallies followed by a multi-month correction to its current almost parabolic upside move. This move began during the first week of November and continues to this day. In fact, we are getting the first indications that the extended correction at least for now has concluded and a new stage has begun. The best way to describe the characteristics of this recent rally is using a short-term 60-minute chart which clearly shows that gold is in a defined cycle.
The chart below is a daily candlestick chart of gold futures from the beginning of January to November 16. After hitting $2078 in mid-March gold would trade through a series of lower highs and lower lows. Gold would trade to four consecutive lower highs and two consecutive lower lows before finding potential support defined by a near triple bottom that began at the end of September and concluded at the beginning of November at $1621.
The Federal Reserve adjusted the size of each rate hike beginning at the June FOMC meeting. For the next three consecutive FOMC meetings the Federal Reserve raised its benchmark rate by 75 basis points after each of their Federal Open Market Committee meetings. Currently, the Federal Reserve has set its benchmark rate between 375 and 400 basis points.
It intends to rise.