Gold prices continued to trade lower after a breakout of 38.2% retracement, with going down by 0.42 percent to close at $1311.20, the lowest closing price since Jan. 2nd. Prices keep trading within a bearish channel after a failed attempt to break through the 2018 high in mid-February and have since settled down to find a few days of support on 2015’s high around $1307.17.
Meanwhile tomorrow’s rate decision will bring a volatility for gold prices. There’s a highly-possible rate hike for the FOMC that has been fairly clear with their intentions to further normalize policy. The bigger question, however, is how many rate hikes will be expected for the Fed. A total of three hikes (including tomorrow’s) has long been the central expectation, but after Mr. Powell’s testimony that he preferred stronger dollar in-front of Congress earlier this month, the idea of four hikes started to more prominently enter the equation.
If there is a more hawkish tone by the Fed, the U.S. dollar can establish a spate of strength long enough to test towards the 91.00 level on DXY, a long-term retracement will show through in Gold.
With the daily chart on the XAU/USD applied, intraday prices are bouncing for a bit, likely to test 38.2% retracement again after getting support on 2015’s high. If it is pulling back later, it may get supports from 2015’s high and 50% retracement level.
Chart 1: XAUUSD Daily
Thank you for inquiry ACY.
Your application has been received, and we will arrange an account manager within 24 hours to contact you! We wish you have pleasant trading experience!
