- Gold price has extended its corrective move to near $1,720.00 ahead of Fed policy.
- The resurgence of recession fears will keep the DXY on the back foot broadly.
- A symmetrical triangle formation is indicating a consolidation ahead.
Gold price (XAU/USD) has shifted into a corrective phase after facing barricades at around $1,728.00 in the Asian session. The precious metal has surrendered the majority of its gains and is likely to remain lackluster as investors are getting anxious ahead of the monetary policy announcement by the Federal Reserve (Fed). The bright metal may display more losses if it drops below Monday’s low at $1,714.80.
A rate hike by the Fed with 75 basis points (bps) looks imminent as price pressures have climbed to 9.1% and are hurting the paychecks of the households badly. This time, the gold prices won’t find significant offers after the rate hike announcement as market participants were betting over a rate hike by 100 bps but the downbeat US economic data trimmed Fed’s ambitious mood.
Initial jobless benefits have reached to seven-month high at 250k and the S&P PMI remained downbeat last week. Now, lower consensus for US Durable Goods Orders is indicating that higher interest rates have started displaying their consequences. This may keep the US dollar index (DXY) on the backfoot on a broader basis. While, on an intraday basis, a firmer rebound in the DXY has dragged the gold prices.
Gold technical analysis
On an hourly scale, the gold price is auctioning in a symmetrical triangle pattern. The upward and downward-sloping trendline of the volatility contraction pattern is placed from July 22 low and high at $1,712.94 and $1,739.37 respectively. The above-mentioned chart pattern indicates a volatility squeeze, which will be followed by an expansion in volumes and candlesticks’ range.
The gold prices are overlapping with the 50-period Exponential Moving Average (EMA) at $1,721.40, which signals a consolidation ahead.
Also, the Relative Strength Index (RSI) (14) has shifted into a 40.00-60.00 range, which signals that the asset is awaiting potential a trigger for a decisive move.
Gold hourly chart
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: No respite to the selling pressure
AUD/USD remained well on the defensive, trading in a volatile fashion that saw spot surpass the 0.6100 hurdle just to fade that uptick afterwards and revisit the 0.5980 towards the end of the NA session.
EUR/USD: Tariffs keep the sentiment subdued
EUR/USD added to Friday’s pullback and revisited the sub-1.0900 area, or two-day lows on the back of further gains in the US Dollar and the widespread demand for the safe-haven universe.
Gold recedes to four-week lows near $2,950
The persistent selling pressure is now dragging Gold prices to the area of fresh multi-week troughs near the $2,950 mark per troy ounce, always amid the continuation of the recovery in the US Dollar, highr US yields across the curve and unabated tariff tensions.
Binance founder CZ becomes strategic advisor to Pakistan's Crypto Council
The Pakistan Crypto Council appointed Binance founder and former CEO Changpeng Zhao (CZ) as a strategic advisor on Monday to provide guidance on crypto infrastructure, education and adoption for the Pakistani government and private companies.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.