Gold attempts to retake all-time high with eyes on FED interest rate decision

Fundamental News and Triggers

  • The gold market is attempting to recapture the all-time high just shy of $2600, with eyes on the Fed judgment, Chairman Jerome Powell’s press conference, and the Dot Plot chart. These events will assist measure the US central bank’s future policy action.
  • The CME Group’s FedWatch Tool indicates that markets expect a 65% chance of a 50 bps interest rate decrease on Fed day. This has led to renewed selling activity in the US Dollar, while US Treasury bond rates have also become defensive due to market nervousness.
  • If the Fed cuts interest rates by 25 basis points today, the US dollar may rise sharply. However, the immediate response to Fed announcements may be eclipsed by the implications of the Fed’s forecasts and Powell’s remarks. As a result, the gold price stays very volatile during the Fed’s event.

 

Technical Triggers

  • Gold is heading towards its next resistance level of $2600 (~Rs 74000) and $2625 (~ Rs 74750) as it has cleared $2550 (Rs 72500) resistance.
  • Silver has gained momentum along with gold and moving towards $32 (~Rs 92000). Buy on dips around $30(~Rs 85000).

 

Support and Resistance

 

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