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Fed rate hike doesn't disrupt gold's bullish trend

Gold has recovered almost half of the losses experienced after its March 2022 peak after creating a strong demand zone around $1,621.40. This support area made a strong triple bottom pattern. Since then, we can see a consecutive higher high, finally breaking the downward trend line. The price retested the trend line at around $1,730.00, but new support at this point prevented the price from returning to the downward trend. The price for Gold is now above the 200 EMA, adding further indication that the trend may have already reversed. 

The price of gold broke and closed above the daily resistance at $1,808.00 yesterday following the CPI news on Tuesday. This daily close at this resistance could be a signal for a buying opportunity but the price should first break the top wick of the daily candle at around $1,825.00. However, gold has taken a very small hit after the release of the Federal Reserve's interest rate decision, but not enough to dissuade gold bulls or embolden bears. The US Fed decided on a 50-basis-points rate hike, which is the last for the year, after 4 consecutive 75-basis-point rate hikes. Along with the rate hike came an indication from Jerome Powell that the bank expects to keep rates higher through next year, with no reductions until 2024. Yet, gold is holding up above $1,800.00, in what could be the year's last great event to affect the metal.

Confluence for price targets beyond $1,825.00 might be found using the MTF Supply and Demand Orderblock indicator. Using this indicator, we can visualise supply and demand zone targets for a climbing gold price, starting from $1,865.00, which could give clues about the strength of any bullish trends and potential points of reversal.

Author

Mark O’Donnell

Mark O’Donnell

Blackbull Markets Limited

Mark O’Donnell is a Research Analyst with BlackBull Markets in Auckland, New Zealand.

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