GOLD: Rebound Above $1,980 Amid FOMC Policy Meeting Anticipation

GOLD :Rebound Above $1,980 Amid FOMC Policy Meeting Anticipation

Gold prices (XAU/USD) showcased resilience during the early European session, rebounding above the $1,980 level after a dip that led to a three-week low. However, any significant upward movement remains uncertain as traders exercise caution ahead of the Federal Reserve's (Fed) imminent policy announcement. The focus is firmly on the outcome of the highly-anticipated FOMC policy meeting scheduled later today.

Fed Policy Uncertainty:

The precious metal's recent price action reflects the prevailing uncertainty over the Fed's near-term policy outlook. Traders are hesitant to make aggressive directional bets, awaiting guidance from the central bank's decision. The uncertainty stems from the recent US inflation report and Friday's positive employment data, leading traders to speculate that the Fed may delay interest-rate cuts until May next year. The resulting positive traction for the US Dollar (USD) could act as a headwind for gold, a non-yielding asset.

Technical Analysis and Bearish Continuation:

From a technical standpoint, gold remains positioned below the 20-moving average in the H4 timeframe, encountering resistance from multiple zones. The current setup indicates a bearish continuation, suggesting that the precious metal may face challenges in sustaining a significant upward trajectory. Traders should closely monitor key resistance levels for potential trend reversals.


Our preference

Short positions below 2030.00 with targets at 1950.00 & 1930.00 in extension.