Gold rebounds as US FED and BOE cuts rate by 25 bps

Fundamental News and Triggers

  • Gold and silver prices have risen following a big sell-off, as FED and BOE cut the interest rates. The US Federal Reserve and Bank of England decreased interest rates by 25 basis points yesterday, as inflation remained close to their objective of 2%.
  • Gold prices rose beyond $2700 after the Federal Reserve chose to decrease interest rates and stated that the consequences of the US election would not be noticed shortly. Precious metals also profited from the Fed’s dovish rate cuts and signals of potential policy flexibility.
  • Powell did not provide any specific forward guidance on the future course of interest rates. The Fed has maintained that it remains data-reliant and will continue to monitor the implications of new information for the economic outlook.

 

Technical Triggers

  • Bullion prices could continue their southward journey this month as they were in an overbought zone for a long period. It would be like one step up and two steps down.
  • Gold has important support at $2650 (~Rs 77000), $2620(~Rs 76000) and $2500 (~Rs 73000) this month. These lower levels could be used by long-term investors for accumulation.
  • Silver has important support at $31 (~Rs 91,000) and $30 (~Rs 88000). These lower levels could be used by long-term investors for accumulation.

 

Support and Resistance

 

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