Gold recovery remains elusive below $1,810, focus on Fed
Although US dollar weakness ahead of the Fed’s verdict put a bid under gold prices, a confluence of 100 and 50-SMA becomes a tough nut to crack for the bulls around $1,807-08. Even if the gold buyers manage to cross the $1,808, a two-week-old downward sloping trend line near $1,810 will be another hurdle before confirming an upside to the month’s top surrounding $1,835. It’s worth noting that the MACD and RSI do favor the upside momentum but after all, it depends upon the Fed Chairman Jerome Powell and his words.
On the contrary, 50% Fibonacci retracement of late June to mid-July upside near $1,792 could test the metal’s intraday selling in case bears retake the controls post FOMC. Following that, the June 29 swing high near $1,765 can offer an intermediate, a break of which will be a call to the last month’s low near $1,750 and mid-April low near $1,725 to the chart. However, any further weakness past $1,725 will be challenged by the $1,700 psychological magnet before directing the sellers to the yearly low near $1,677. Overall, Fed is likely to reiterate its cautious optimism while keeping the monetary policy unchanged. Though, mentioning tapering is the key for USD bulls, who are inversely correlated to gold.
On the contrary, 50% Fibonacci retracement of late June to mid-July upside near $1,792 could test the metal’s intraday selling in case bears retake the controls post FOMC. Following that, the June 29 swing high near $1,765 can offer an intermediate, a break of which will be a call to the last month’s low near $1,750 and mid-April low near $1,725 to the chart. However, any further weakness past $1,725 will be challenged by the $1,700 psychological magnet before directing the sellers to the yearly low near $1,677. Overall, Fed is likely to reiterate its cautious optimism while keeping the monetary policy unchanged. Though, mentioning tapering is the key for USD bulls, who are inversely correlated to gold.