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Gold is stabilizing around $1,950, midway between the new high of $1,980 and the 2011 peak of around $1,921.50, as bulls are taking a breather ahead of the key Fed decision which is expected to strike a dovish stance amid rising virus risks to the economy. Technically, the yellow metal trades in a narrow range within a symmetrical triangle formation suggesting that the upside still remains favored, FXStreet’s Dhwani Mehta briefs.

Key quotes

“In the lead up to the Fed showdown, gold is consolidating the previous moves in a tight range around $1950. The bullish bias still remains in place amid dovish Fed expectations, as the US economic recovery stalls on the back of the virus second-wave ramping up across the US. Fed could hint at adopting yield curve control, which could send the real yields further into the negative zone, triggering a fresh sell-off in the US dollar.”

“Given that gold closed above the critical 21-hourly Simple Moving Average (HMA) on a daily basis, then at $1946, suggests that the upside bias still remains favored.”

“The hourly RSI trades flatlined but holds above the 50 levels, keeping the buyers hopeful. Therefore, the metal could likely chart a symmetrical triangle bullish breakout above the falling trendline resistance at $1962 on an hourly closing basis. Subsequently, the bulls will retest the record highs, as the quest to conquer the $2000 level continues.”

“The $1945 demand area will continue to cushion the downside. That level is the confluence of the bullish 21 and 50-HMAs. Sellers could look for entries below the latter to test the next crucial support seen around $1920-18 region, which is the confluence of the upward sloping 100-HMA and rising trendline support. Further south, the $1900 level will be the level to beat for the bears, in order to negate the near-term bullish perspective.”