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FOMC meeting minutes tonight could cause the price of Gold to fall. Will the price reach $1800.00?
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GOLD
The price of Gold could fall tonight as investors await the FOMC meeting minutes. Recent USD data has been good for the economy but bad for inflation targets. The Fed has been vocal with their growing concerns of strong data and could begin to hike for longer. The employment data out of the US came in higher than expected above 500k in January. This shocked the Federal Reserve Chairman himself and would have put him on high alert. USD has strengthened with all this strong data to the inflationary pressures.
A strong USD and a higher US interest rate would be negative for the price of Gold and could bring the price into the key support of $1800.00. Price has recently rejected the key resistance of $1960.00 and has been trading lower. This can be seen on lower time frames as the retracement phases have been small in comparison to the impulsive phases.
The price on the chart has traded through multiple technical levels and some observations included:
- Price has fallen on news of potential rate hikes in the US.
- This combined with the USD strength meant sellers would re-enter on any rallies.
- Currently the price is trading between a range of $1845.00 and $1818.00.
- A break of the range lows would see price head for the major targets of $1800.00.
Have you watched our GBPJPY analysis? You can see it here.
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