Gold Prices Teeter at $1,930 Mark Ahead of Fed’s Crucial Announcement
20 Sep 2023
Prior to Fed policy announcements, gold prices ranged around $1,930.
The price of gold is hovering at $1,930 on Wednesday, down from its two-week high of $1,937, as investors eagerly await the US Federal Reserve’s (Fed) decision on interest rates in hopes that the recent upswing would resume. Although there was a slight pullback on Tuesday, the gold price managed to close above the 50-daily Moving Average (DMA) at $1,931.
However, the Fed’s decision on interest rates will be crucial in deciding the future course of the gold price.
Gold prices increased from multiple catalysts ahead of the Fed.
In comparison to its key rivals, the United States Dollar (USD) has entered a phase of positive consolidation close to a six-month high, helped by the most recent increase in US Treasury bond yields and widespread risk aversion.
In the lead-up to the Fed policy announcement and Chairman Jerome Powell’s press conference, traders are risk-averse as usual prudence rules. Everyone continues to keep a watch on the Fed’s most recent economic projections, known as the “Dot Plot” graphic, as this information will be crucial in determining whether another rate hike is still in the cards. Due to these developments, traders avoid making new wagers on the US Dollar, which causes the price of gold to sway within a recognizable range.
After the People’s Bank of China (PBOC) kept the Loan Prime Rate (LPR) constant throughout the course of time, risk-off flows also gained momentum. Markets anticipated a decrease in China’s prime lending rate, which would allay worries about the real estate market and aid in the country’s economic recovery. Investors are also concerned that the recent increase in oil prices may exacerbate global inflationary pressure, leading the Fed to restate its call for “higher interest rates for longer.”
GOLD TECHNICAL ANALYSIS DAILY CHART:
Gold is currently trading within an up channel.
Gold is positioned above the 20&50 Moving Average (SMA).
The Relative Strength Index (RSI) is in the buying zone, while the Stochastic oscillator suggests a neutral trend.
Immediate Resistance level: 1932.47
Immediate support level: 1922.11
HOW TO TRADE GOLD
After a brief rise, the price of gold fell, and it began to trade lower until it found support, from which point it tried to go higher once more. Gold is currently trading at a critical resistance level; if this level is broken, further upside is expected.
TRADE SUGGESTION- STOP BUY – 1935.82, TAKE PROFIT AT- 1949.54, SL AT- 1926.30.