Fundamental Descriptions: Gold was down on Wednesday morning in Asia as U.S. Treasury yields rose and the upcoming policy decision from the U.S. Federal Reserve dented demand for the yellow metal. The Fed is widely expected to announce a big interest rate hike in an effort to curb high inflation when it hands down its policy decision later in the day. The Federal Open Market Committee will release its policy statement, followed by Fed Chairman Jerome Powell’s news conference.
Technical View: Gold Price remains vulnerable after Tuesday’s dead cat bounce. The US dollar is set for a big break higher on an increasingly aggressive Fed. Rejection at 100-DMA recalls sellers, with eyes on the 200-DMA at $1,835. As of writing, it is trading near 1870, well below our previous support S2. It is to be seen whether the bull will be able to re test 1880-1890 price zone.
Alternate Scenario: A 50-basis point hike is now priced in by markets. Any aggressive hawkish bets for future in order to curb rising inflation may pressure gold in near term.
Technical View: Gold Price remains vulnerable after Tuesday’s dead cat bounce. The US dollar is set for a big break higher on an increasingly aggressive Fed. Rejection at 100-DMA recalls sellers, with eyes on the 200-DMA at $1,835. As of writing, it is trading near 1870, well below our previous support S2. It is to be seen whether the bull will be able to re test 1880-1890 price zone.
Alternate Scenario: A 50-basis point hike is now priced in by markets. Any aggressive hawkish bets for future in order to curb rising inflation may pressure gold in near term.