Gold traders are cautious

Naeem Aslam Zaye Capital Markets

Gold

The precious metal gold price is losing its mojo as traders are hesitant to place any big bets ahead of the Fed meeting. The Federal Reserve is expected to announce its monetary policy decision tomorrow, and market players are widely expecting no change in their monetary policy. However, what traders are concerned about is the pace of their asset purchase program, as there is some evidence of those purchases losing some momentum.

Another factor that is also likely to influence the gold price is the outlook of the US economy presented by the Chairman of the Federal Reserve, Jerome Powell. It is likely that we may see some hint of bullish views in the Chairman’s view because if we look at the new orders’ data, they saw a solid increase in March, and this gives further evidence that economic growth is accelerating in the US. If we do see any hint of overconfidence in his approach, traders are likely to take that as a clue, and that can spur a rally for the dollar index which could be negative for the gold price.

As for the technical price, the resistance is at $1,800, and only a break of this level will assure investors that we may see a move towards the next technical resistance of $1,850. However, if the price fails to break above this, we could see the gold price revisiting the $1,750.

Author

Naeem Aslam

Zaye Capital Markets

Based in London, Naeem Aslam is the co-founder of CompareBroker.io and is well-known on financial TV with regular contributions on Bloomberg, CNBC, BBC, Fox Business, France24, Sky News, Al Jazeera and many other tier-one media across the globe.

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