Gold turns alongside a major anticipation of the interest rate decision in the upcoming Federal Reserve
- Gold settles on Wednesday after recovering approximately 1 % the day before.
- All eyes are in the interest rate of the Federal Reserve Council later in the day.
- Gold is in a better position to stimulate a new height at all.
Gold price (Xau/USD) is trading almost flat and settling about $ 2,760 at the time of writing this report on Wednesday after Whipsaw starts to the week. There are no major moves, as many traders sit at their hands until the Federal Reserve’s interest rate decision later in the day. The US rates are often seen as useful for gold to circulate higher.
Market expectations show that the Federal Reserve will be most likely that interest rates are unchanged at 4.25 % -4.50 %, so traders will focus on Federal Reserve President Jerome Powell’s comments on the central bank policy expectations. Here, merchants may be in great disappointment. Powell is not expected to comment on President Donald Trump’s criticism of technical studies, why or how Trump calls for low rates. Instead, Powell is expected to repeat that the central bank remains independent and depends on data and will focus on its double mandate: inflation and job market.
Daily Digest Market Movers: ready for a new height ever
- According to Bloomberg, market expectations are dedicated to Federal Reserve Chairman Jerome Powell to provide a temporary stop. This should see a lean yield, which opens the opportunity for gold to rise above and print a new height at all.
- Australian hedge funds aim to be exposed to gold during the second period of US President Donald Trump. They are betting that his administration will fail to arrest the escalating American debts and that gold will serve as an antidote to the bond market massacre, according to financial review reports.
- At 19:00 GMT, the Federal Reserve will present the monetary policy decision, followed by a press conference from the Federal Reserve Chairman Jerome Powell at 19:30 GMT.
Technical Analysis: Sleeping the situation puts gold for several time
The Gold price has put itself at an ideal point to reach the highest new level ever in the event of the Federal Reserve on Wednesday. The decline has decreased almost earlier this week, and gold is almost circulating at the present time. An absolutely new possibility is expected to pick up the comments from the President of the Federal Reserve Chairman, who is expected to provide a temporary stop.
The first line of support remains at $ 2721, a type of dual summit in November and December broken on January 21. This decreases to $ 2,709 (October 23, 2024, low) in focusing as a second close support. If the above levels are cut off, look for diving again to $ 2680 with a full sale.
Although the opportunity window has started to close, it is still possible that gold can reach the highest level at all times of $ 2,790, which is about 1 % away from the current levels. Once above it, the highest new level ever will present itself. Meanwhile, some analysts and strategists have declined in invitations to $ 3,000, but it seems that $ 2800 is a good starting point like the next resistance on the upper side.
Xau/USD: Daily chart
Common Gold questions
Gold played a major role in human history, as it was widely used as a store for value and exchange. Currently, regardless of its brilliance and use of jewelry, the precious metal is widely seen as a safe asset, which means it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against currency decline because it does not depend on any specific source or government.
Central banks are the largest gold holders. In their goal to support their currencies at troubled times, central banks tend to diversify their reserves and buy gold to improve the powerful power and currency. High gold reserves can be a source of confidence to the dissolved country. Central banks added 1136 tons of gold worth $ 70 billion to their reserves in 2022, according to the data of the Golden Golden Council. This is the highest annual purchase since the start of the records. Central banks of emerging economies such as China, India and Turkey increase their gold reserves.
Gold has a counter -relationship with the US dollar and the United States Treasury, which is one of the main reserves and safe assets. When the dollar decreases, gold tends to rise, allowing investors and central banks to diversify their assets at turbulent times. Gold is inversely associated with the origins of the risk. The assembly in the stock market weakens the price of gold, while sales in the most dangerous markets tend to prefer precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of deep stagnation can escalate the price of gold due to its safe situation. As a lower asset than the return, gold tends to rise with low interest rates, while the high cost of money usually reaches the yellow metal. However, most moves depend on how the US dollar (USD) is behaved as the original is priced in dollars (Xau/USD). The strong dollar tends to maintain the price of gold -controlled gold, while the weakest dollar is likely to increase the price of gold.
