Gold holds firm tone ahead of Fed minutes
|Spot gold regained traction on Wednesday and bounced 0.5% following Tuesday’s 1% drop, keeping steady tone on strong demand as safe haven against geopolitical tensions and a hedge against inflation.
Traders await release of Fed minutes of its Jan 25/26 policy meeting, due later today, to get more clues about the US central bank’s next steps.
The US Federal Reserve signaled it will start its tightening cycle in March, with 0.25% hike, but a number of market participants expects more aggressive approach after inflation in January surged to a 40-year high, and bet for 0.5% raise of interest rates.
Economists expect inflation to remain stubbornly high that would prompt the Fed to act faster than expected, with such scenario to be negative for gold as higher interest rates increase cost of non-yielding metal.
Technical studies on daily chart remain bullish but somewhat extended that may slow bulls on attempts towards key barriers at $1876/79 (50% retracement of $2074/$1677 descend / 20-d upper Bollinger band /2022 high) which guard targets at $1900/23 (round-figure / Fibo 61.8%).
Solid supports lay at $1841/36 (Fibo 38.2% of $1780/$1879 upleg / rising 10DMA), with break here to sideline bulls for deeper pullback.
Res: 1865; 1874; 1879; 1881
Sup: 1856; 1850; 1844; 1841
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.