The US dollar traded higher against a few major currencies recently, but commodities were not affected by its move. GOLD recently broke an important resistance area, which has opened the doors for upside acceleration in the short term. There is a very important release lined up later today, as the FOMC meeting minutes will be published during the NY session. We need to see how the event shapes out and whether the fed sticks with their hawkish stance or not. One might witness a lot of moves in pairs such as EURUSD and GBPUSD along with commodities such as GOLD and SILVER.
There were a couple of patterns formed on the hourly chart of GOLD. The first one was a contracting triangle, which was broken earlier and paved way for a move towards the $1200 level. It then corrected lower and traded towards the 61.8% fib retracement level of the last leg from the $1183 low to $1204 high. There was again a bearish trend line formed on the hourly chart, and GOLD surged higher and jumped above the same. There is a strong chance of a move towards the last high at least. If the momentum continues to shape, then the prices of yellow metal might head towards the $1220 level.
On the downside, the 61.8% fib level might continue to act as a support in the near term. A break below the same might call for more downside towards the $1180 level. The 100 hourly MA is sitting just below the mentioned level which might also act as a support.
Overall, one might consider buying dips as long as the $1180 level holds.
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Posted By Simon Ji of IKOFX
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