XAU/USD 4H Chart 7:35AM EDT 6/20/2012
As risk continues to climb after the 6/18 session dip, the USD and JPY has been weak. With the FOMC meeting tomorrow, this has the feel that the market is pricing in more a higher likelihood of QE. However, a look at the price action in gold suggests otherwise.
QE by the Fed should be risk-on, and USD-negative. Both are true when we look at the SP500 and majors like EUR/USD, GBP/USD and AUD/USD. However, if the culprit is pricing in of QE, gold and commodities like oil should also be rallying as well. This is not the case.
Instead we see gold flattening out since hitting 1633.75 last Friday (6/15). This week, it failed to push above this and looks to be developing a double top. A break below the 1608.40 pivot area should do it, although we have a support pivot going to 1604.50.
