- Gold remains pressured below $1800 ahead of FOMC outcome.
- XAU/USD trapped between two key averages on the 1D chart.
- Fed’s decision to trigger a fresh direction in gold, Biden’s speech also eyed.
Gold (XAU/USD) dropped on Tuesday but held within its recent trading range between $1800-$1765, as the US Treasury yields surged and pushed the US dollar higher alongside. Better-than-expected US CB Consumer Confidence data and expectations of President Joe Biden’s fiscal stimulus fuelled a fresh rally in the returns on the US debt. Meanwhile, mixed performance on the US stocks amid pre-Fed caution and earnings reports lifted the US dollar’s safe-haven appeal, which added to gold’s decline.
This Wednesday, nothing seems to have changed for the yellow metal, as the US dollar trades firmer while the yields hold onto the recent advance ahead of the FOMC monetary policy decision. Although the Fed is unlikely to alter its policy stance, investors will pay close attention to any hints on a likely tapering of the bond-buying program, given the optimism over improving economic outlook. The focus will also remain on fresh updates on the fiscal stimulus, as Biden is set to address Congress later on Wednesday.
Gold Price Chart - Technical outlook
Gold: Daily chart
As observed on the daily chart, gold is holding up in a $50 range since mid-April, with the horizontal 100-daily moving average (DMA) continuing to limit the upside.
Meanwhile, buyers continue to lurk on every dip towards the 21-DMA. The 100-DMA and 21-DMA lie at $1801 and $1753 respectively.
The all-important FOMC decision is likely to determine the next direction for the metal, with chances of an upside break seen higher, as the 14-day Relative Strength Index (RSI) keeps its range above 50.00.
To conclude, gold’s fate hinges on the Fed’s announcements while acceptance on a break of either of the two barriers could trigger sharp moves.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
AUD/USD corrects toward 0.6850, awaits US PCE Price Index
AUD/USD is falling back toward 0.6850 in Friday's Asian trading, reversing from near 19-month peak. A tepid US Dollar bounce drags the pair lower but the downside appears called by the latest Chinese stimulus measures, which boost risk sentiment ahead of US PCE data.
USD/JPY pares gains toward 145.00 after Tokyo CPI inflation data
USD/JPY is paring back gains to head toward 145.00 in the Asian session on Friday, as Tokyo CPI inflation data keep hopes of BoJ rate hikes alive. However, intensifying risk flows on China's policy optimism support the pair's renewed upside. The focus shifts to the US PCE inflation data.
Gold price consolidates below record high as traders await US PCE Price Index
Gold price climbed to a fresh all-time peak on Thursday amid dovish Fed expectations. The USD languished near the YTD low and shrugged off Thursday’s upbeat US data. The upbeat market mood caps the XAU/USD ahead of the key US PCE Price Index.
Avalanche rallies following launch of incentive program for developers
Avalanche announced the launch of Retro9000 on Thursday as part of its larger Avalanche9000 upgrade. Retro9000 is a program designed to support developers with up to $40 million in grants for building on the Avalanche testnet.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.