The gold price has been consolidating near a two-and-a-half-week high reached earlier.
The gold price consolidated the previous day’s big gains and oscillated in a narrow trading band just below the $2,020 mark. Or a two-and-a-half-week high reached during Wednesday’s Asian session.
The uncertainty around the Federal Reserve’s rate-hike plan appears to be a drag.
Traders currently appear hesitant to put aggressive bets. Preferring to await the outcome of a two-day Federal Open Market Committee (FOMC) meeting. The Federal Reserve (Fed) is due to publish its policy decision later today at 18:00 GMT. And interest rates are largely predicted to be raised by 25 basis points (bps). However, markets remain concerned about a potential pause in the Fed’s policy tightening cycle. As inflation in the United States (US) remains well above the central bank’s target range.
As a result, investors will closely monitor the associated monetary policies. The gold price consolidated the previous day’s big gains and oscillated in a narrow trading band just below the $2,020 mark, or a two-and-a-half-week high reached during Wednesday’s Asian session. Traders currently appear hesitant to put aggressive bets, preferring to await the outcome of a two-day Federal Open Market Committee (FOMC) meeting.
The Federal Reserve (Fed) is due to publish its policy decision later today at 18:00 GMT, and interest rates are largely predicted to be raised by 25 basis points (bps). However, markets remain concerned about a potential pause in the Fed’s policy tightening cycle, as inflation in the United States (US) remains well above the central bank’s target range.
New financial concerns and a weakened US dollar provide support ahead of the FOMC decision.
As a result, investors will closely monitor the associated monetary policies. to meet its obligations. The warning came as Republican and Democratic lawmakers sparred about how much the Congressional debt limit should be raised. This sparked a wave of selling in US equity markets on Tuesday, and the resulting spillover effect brought Asian stocks lower on Wednesday. Aside from that, the ongoing retracement of the US Dollar (USD) from a three-week high reached the previous day supports the safe-haven XAUUSD ahead of the key central bank event risk and important US macro data.
The release of the ADP report on private-sector jobs and the ISM Services PMI headlines Wednesday’s US economic calendar. However, the immediate market reaction is likely to be limited as attention remains focused on the highly anticipated FOMC policy decision.
The marketplace On Friday, the official US monthly jobs statistics, known colloquially as the Nonfarm Payrolls (NFP) report, will be released. This, in turn, will influence the near-term USD price dynamics and provide a new directional push to the gold price.
Gold Technical Outlook
Technically, the overnight sustained increase and acceptance over the $2,010-$2,012 supply zone. May serve as a new trigger for optimistic traders.
Furthermore, oscillators on the daily chart have only recently begun to gain positive traction. And are still far from being in the overbought zone. This raises the chance of a further near-term appreciating advance into the $2,039-$2,040 zone. Above which the gold price could try to test the YTD peak. Which was reached on April 13 in the $2,048-$2,049 range.
A sustained rally over the latter will pave the way for a move towards the 2022 swing high. Which is expected to be around the $2,070 region and the $2,074-$2,075 zone. Or the all-time high achieved in August 2020.
In contrast, the psychological level of $2,000 now shields the immediate downside. Any following the decline may continue to draw new buyers near the $1,980 horizontal level. And find reasonable support near the $1,970 range.
However, some follow-through selling could shift the near-term bias in favors of bearish traders. Making the gold price vulnerable to a further drop towards the $1,948 resistance breakpoint. Which has now turned support.
The bearish trend could extend to the upward-sloping 50-day Simple Moving Average (SMA), which is currently around $1,942 and, if broken, will expose the $1,900 round-figure mark.
The handle aligns with the 100-day SMA and should serve as a solid foundation for the XAUUSD.
