Gold Price Analysis: XAU/USD remains trapped between key DMAs ahead of Fed week
- Gold awaits a breakout from the recent trading range.
- XAU/USD remains locked between 50-DMA and 200-DMA.
- All eyes on the Fed decision and a potential US fiscal stimulus deal.
Gold (XAU/USD) resumed its bearish momentum following a brief recovery from multi-month lows sub-$1800 in the last week.
The sellers returned after the metal faced rejection at the 50-daily moving average (DMA), now at $1875.
On Wednesday, gold fell as much as 1% to near the $1825 region and spent the rest of the week meandering near the latter, with the upside attempts capped by the 21-DMA of $1841.
Gold Price Chart: Daily
XAU/USD’s daily chart clearly shows that the price continues to oscillate in a defined range. Acceptance above the 50-DMA is critical to reviving the recovery momentum from four-month troughs of $1765.
Meanwhile, the 200-DMA support at $1809 is the level to beat for the bears. The 14-day Relative Strength Index (RSI) settled the week at 47.01, keeping the odds for additional downside alive.
Further, a failure to deliver a weekly closing above the critical short-term hurdle of 21-DMA, also suggests that more declines could be in the offing.
However, the Fed’s final monetary policy decision of this year and a likely US fiscal stimulus deal could have a significant impact on the gold price action in the week ahead.
Gold Additional levels
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
