Gold prints falling wedge on FOMC day
Despite battling with 200-HMA, gold stays inside a bullish chart formation on a key day. Also favoring the metal buyers is a one-week-old rising trend line and likely US dollar weakness due to the expected dovish comments from the US Federal Reserve. However, sustained trading beyond $1,855 becomes necessary for the bulls to target $1,875 and then head towards the monthly peak surrounding $1,960. During the run, the $1,900 round-figure can play its role to test the upside momentum.
Meanwhile, the stated support line near $1,843 and the lower end of the wedge, at $1,842 now, can restrict the yellow metal’s short-term downside before $1,830. Should the gold bears remain dominant past-$1,830, coupled with a surprise US dollar strength, the monthly low near $1,803 holds the key to heavy fall targeting November bottom close to $1,764. It should be noted that market consensus favors no rate action from the US central bank but downbeat statements and weak economic forecasts can’t be ruled out. As a result, a surprise move, like cautious optimism due to covid vaccination in the Fed’s tone can propel the US dollar and back the gold sellers.
Meanwhile, the stated support line near $1,843 and the lower end of the wedge, at $1,842 now, can restrict the yellow metal’s short-term downside before $1,830. Should the gold bears remain dominant past-$1,830, coupled with a surprise US dollar strength, the monthly low near $1,803 holds the key to heavy fall targeting November bottom close to $1,764. It should be noted that market consensus favors no rate action from the US central bank but downbeat statements and weak economic forecasts can’t be ruled out. As a result, a surprise move, like cautious optimism due to covid vaccination in the Fed’s tone can propel the US dollar and back the gold sellers.