- Spot gold has been unable to break out of the sideways range between $1,214.47.
- Gold made a fresh low scored on the FOMC down at $1,190.71, (channel support low located at $1,183.33).
The gold price was volatile around the Fed statement as traders grappled with the understanding of the Fed’s removal of ‘accommodative’ which initially sent the greenback lower as the market figured that the Fed was coming to the end of its tightening cycle at the long end of the dots while it gets closer to its neutral target. However, there was a sharp turning around in the dollar leading into when Powell confirmed that the Fed was staying its course in tightening with a bullish outlook for the US economy.
FOMC ‘accommodative’ removal from statement – dollar went lower, what’s that all about?
Gold subsequently dropped from $1,200 to a low of $1,190 before heading back to $1,199 and then flipping over to $1,194 and drifted into early Asia around current levels at $1,195.
NAFTA/US/Canada: “We are not getting along at all with Canada’s trade negotiators” – Trump
We are currently receiving a number of geopolitical headlines and the most prominent is Trump’s hardline with Canada where he claims to have cancelled a 1-1 meeting with Canada’s PM Trudeau. This has sent risk sentiment off a touch for the Asian session which looks quiet as traders now look ahead to the US GDP gran finale in the US session later today.
Fed rates may have entered neutral territory – Wells Fargo
Gold levels
- Higher Side Levels: 1210 (round number), 1215.80 (Sept 21 high), 1217 (Aug 28 high).
- Lower Side Levels: 1194.70 (daily low), 1190.40 (Sept 11 low), 1184.40 (mid-Aug low).
Gold is trading between a familiar $1187/$1214 range while bears target a close below the base of the daily cloud at $1195 initially. There are otherwise upside prospects on a break of last week’s doji candle high through $1,204 while bulls look to make a run all the way back to $1309. Initial resistance is located at 1204, 1208, 1214 and 1217 while a break below the 1200 psychological level opens 1195, 1191, 1187 and 1183.
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