Gold: corrective rally remains elusive despite dovish Fed

Gold (XAU/USD) looks set for a corrective rally to $1,302, the technical charts indicate.
Dovish Fed fails to put a bid under the yellow metal.

Omkar Godbole FXStreet Contributor

The multiple long-tailed daily doji candles and a strong bullish price relative strength index (RSI) divergence in the 4-hour chart indicates scope for a corrective rally in gold (XAU/USD) to $1,302 levels.

However, the yellow metal continues to have a tough time scaling the resistance offered by the descending (bearish) 50-candle moving average (MA) in the 4-hour chart, currently seen at $1,295.

Gold fails to cheer dovish Fed

The Fed minutes released yesterday used the word “symmetric” nine times in reference to inflation, indicating the policymakers would allow inflation to run above the 2 percent target for some time. Further, the minutes warned about the negative impact of Trump administration's get-tough trade policy.

The dollar index (DXY) retreated from 94.19 to 93.86 in response to dovish Fed minutes. Meanwhile, the 10-year treasury yield fell below 3 percent. Still, the metal failed to catch a bid, which is usually the case when the bearish sentiment is strong.

Gold Technical Levels

As of writing, gold is trading at $1,295/Oz. The resistance is seen at$1,297 (10-day MA), $1,300 (psychological hurdle), and $1,307 (200-day MA). Meanwhile, support is lined up at $1,293 (5-day MA), $1,287 (previous day's low), and $1,282 (May 21 low).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Neutral	Shrinking
1H	Bearish	Neutral	Shrinking
4H	Bearish	Neutral	Expanding
1D	Bullish	Neutral	Expanding
1W	Bearish	Neutral	Low
Updated May 24, 02:15 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD tests nine-day EMA support near 1.1850

EUR/USD inches lower during the Asian hours on Monday, trading around 1.1870 at the time of writing. The 14-day Relative Strength Index momentum indicator at 56 stays above the midline, confirming improving momentum. RSI has cooled from prior overbought readings but stabilizes above 50, suggesting dips could stay limited before buyers reassert control.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold slides below $5,000 amid USD uptick and positive risk tone; downside seems limited

Gold attracts fresh sellers at the start of a new week and reverses a part of Friday's strong move up of over $150 from sub-$4,900 levels. The commodity slides back below the $5,000 psychological mark during the Asian session, though the downside potential seems limited amid a combination of supporting factors.

Bitcoin, Ethereum and Ripple consolidate within key ranges as selling pressure eases

Bitcoin and Ethereum prices have been trading sideways within key ranges following the massive correction. Meanwhile, XRP recovers slightly, breaking above the key resistance zone. The top three cryptocurrencies hint at a potential short-term recovery, with momentum indicators showing fading bearish signs.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.