- XAU/USD appreciates $20 after the Fed statement release to hit session highs at $1,731.
- Gold prices have appreciated about 2.5% over the last three days.
- Above $1,730 the precious metal approaches long-term highs at $1,765.
XAU/USD has moved $20 up after to reach session highs at 1,731 after the US Federal Reserve released its monetary policy decisions and a set of downbeat economic forecasts for 2020.
The Fed anticipates a painful economic recovery
The Federal Reserve has kept its benchmark interest rate unchanged at 0%-0.25% and dampened market hopes of a quick economic recovery. The bank anticipates a difficult comeback after the COVID-19 shutdown, forecasting a 6.5% contraction for 2020 with the unemployment level at 9.3% by year-end.
Furthermore, the bank has reaffirmed its commitment to maintaining the overnight funds’ rate near zero until, at least 2022 and the pace of bonds purchases at least at the current levels, that is $80 billion per month in Treasuries and $40 billion per month in agency and mortgage-backed securities.
XAU/USD approaches long-term highs at $1,765
The precious metal is set to complete its third consecutive day in green, appreciating about 2.5% after bouncing at $1,6070 lows on June 5. XAU/USD is now testing resistance at $1,730 area (intra-day highs) with next potential resistance levels at $1,744 (June 1, 2 highs) ahead of long-term highs at $1,765.
On the downside, immediate support lies at the 50-day SMA now at $1,703 intra-day low, and below here, $ 1,692 (June 9 low) and $1,670 (June 5 low).
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