Gold prices took a breather on Wednesday, hovering below the $2,300 mark after touching a fresh four-week low of $2,281. Traders exercised caution, refraining from making significant directional bets on the precious metal as they awaited the highly anticipated US Federal Reserve interest rate decision scheduled later in the day.
Amidst the backdrop of market uncertainty, economic forecasts painted a mixed picture for the US economy. Forecasts for key indicators such as the S&P Global US Manufacturing PMI, ISM Manufacturing PMI, and JOLTs Job Openings revealed expectations for modest declines compared to previous figures. However, all eyes remained fixed on the Federal Reserve's interest rate decision, with analysts widely expecting the central bank to maintain rates at the current level of 5.50%.
Federal Reserve Chair Jerome Powell's anticipated stance added to the market's cautious sentiment. With expectations leaning towards a hawkish posture from Powell, investors remained on edge, wary of potential shifts in monetary policy.
In today's trading session, Gold exhibited price action indicative of underlying uncertainty. On the one-hour timeframe, the precious metal dipped to $2,281.48, slightly lower than the previous day's low of $2,285.01.
Technical indicators further underscored the prevailing bearish sentiment in the Gold market. Major indicators such as the Exponential Moving Averages (EMA) and volume profile indicator signaled bearish conditions, with EMA 50 positioned below EMA 200 and the market trading below the value area as highlighted by pink volume profile bars. Oscillator indicators like the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) echoed similar sentiments, with MACD's signal line and histograms significantly below the 0 line, and RSI reaching oversold levels.
As traders brace for potential market rebounds, key resistance levels to monitor include the upper band of the Bollinger band, EMA 50, and EMA 200.
With the Federal Reserve's interest rate decision looming large, Gold prices are likely to remain sensitive to any hints of monetary policy adjustments, with market participants closely monitoring Chair Powell's remarks for cues on the future trajectory of interest rates and the broader economy.
Forecast 49.9 vs Previous 51.9
Forecast 50.0 vs Previous 50.3
Forecast 55.5 vs Previous 55.8
Forecast 8.680M vs Previous 8.756M
Forecast 5.50 vs Previous 5.50
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