gold price is struggling to surpass the level of $1,911.
gold(XAUUSD) has reversed early rebound gains and is currently trading at $1,920 on Tuesday. The United States Dollar (USD) is attempting to extend its recent uptrend as risk-off flows resume amid nervous markets ahead of this week’s policy statements from the major central banks.
gold(XAUUSD) bulls continue to be cautious As US Federal Reserve’s two-day policy meeting gets underway.
As the US Federal Reserve (Fed) begins its two-day monetary policy meeting later this Tuesday. Investors have been more cautious and have refrained from making new directional bets on the price of gold.
At its meeting in February, the Federal Reserve is generally predicted to raise interest rates by 25 basis points (bps). However, given the above-predicted United States Gross Domestic Product, industry analysts now think that the Federal Reserve may end up being much less dovish than originally anticipated (GDP). However, the remarks made by Federal Reserve Chairman Jerome Powell will be crucial for the future movement of the gold price.
gold market may see a lengthy correction as it repositions itself in front of the major American events.
If the US central bank were to hint at a potential break in the cycle of tightening, it may provide the price of gold, which does not bear interest, the much-needed boost.
In the interim, traders will be anticipating the carefully awaited Employment Cost Index (Q4) from the Federal Reserve and the Conference Board Consumer Confidence statistics for new clues on the state of the US economy. The United States Employment Cost Index is predicted to decline from the 1.2% recorded in the third quarter to 1.1% in Q4 2022.
Technical Outlook
gold is still in a phase of stabilization after last Thursday’s confirmation of a rising wedge collapse. Before the crucial US Federal Reserve two-day policy meeting, gold bulls have been able to establish support close to the $1,915 area.
The risks are still tilted to the upside in the near term despite a small increase in the 14-day Relative Strength Index (RSI). But in order to stop the corrective decline, gold buyers must first retake the $1,935 barrier.
The psychological level of $1,950 is the next major barrier to overcome for gold bulls before they can go on to the wedge confluence at $1,959. The Gold price saw a corrective dip on Friday after seeing a fake out to the upside from a rising wedge formation on Tuesday.
Alternatively, the previous week’s low at $1,911 will be exposed if there is a prolonged decline below the aforementioned support area at $1,915.
Should the drop gather momentum again, the $1,900 level will remain the last barrier that gold purchasers must protect. The bullish 21-Daily Moving Average (DMA) clings at that level.
