- Gold price is displaying back and forth moves in a $4 range as investors await Fed policy.
- A slowdown in US economic indicators states that the option of a 1% rate hike by the Fed is not viable.
- S&P500 futures have rebounded after displaying losses on Tuesday and may underpin the risk-on again.
Gold price (XAU/USD) has marked its territory and is respecting the levels as investors are awaiting the announcement of the interest rate decision by the Federal Reserve (Fed) for initiating an informed decision. The precious metal is auctioning in a $1,716.00-1,720.00 range and is likely to remain on the sidelines.
Also, the US dollar index (DXY) is replicating an inventory distribution structure after a mild correction at the open. The DXY witnessed a sheer upside move on Tuesday as investors turned cautious ahead of the commentary from Fed chair Jerome Powell on interest rates and further guidance.
Well, the threatened option of 100 basis points (bps) is out of the picture as the US economic indicators are not empowering the Fed to go all in unhesitatingly. However, the option of a 75 bps rate hike is still on its toes and is likely to be dictated. This may elevate the interest rates to 2.25-2.50%.
Meanwhile, S&P500 futures have rebounded overnight after displaying losses on Tuesday. This may support the risk-perceived assets and the DXY may display a downside break.
Gold technical analysis
On an hourly scale, the gold price is auctioning in a descending triangle pattern. The downward-sloping trendline of the volatility contraction pattern is placed from July 22 high at $1,739.37. While the horizontal support is placed from July 22 low at $1,712.94. The gold prices are overlapping with the 20-period Exponential Moving Average (EMA) at $1,718.70, which signals a consolidation ahead.
Also, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00 range, which signals that the asset is awaiting potential a trigger for a decisive move.
Gold hourly chart
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY holds above 155.50 ahead of BoJ policy announcement
USD/JPY is trading tightly above 155.50, off multi-year highs ahead of the BoJ policy announcement. The Yen draws support from higher Japanese bond yields even as the Tokyo CPI inflation cooled more than expected.
AUD/USD extends gains toward 0.6550 after Australian PPI data
AUD/USD is extending gains toward 0.6550 in Asian trading on Friday. The pair capitalizes on an annual increase in Australian PPI data. Meanwhile, a softer US Dollar and improving market mood also underpin the Aussie ahead of the US PCE inflation data.
Gold soars as US economic woes and inflation fears grip investors
Gold prices advanced modestly during Thursday’s North American session, gaining more than 0.5% following the release of crucial economic data from the United States. GDP figures for the first quarter of 2024 missed estimates, increasing speculation that the US Fed could lower borrowing costs.
Stripe looks to bring back crypto payments as stablecoin market cap hits all-time high
Stripe announced on Thursday that it would add support for USDC stablecoin, as the stablecoin market exploded in March, according to reports by Cryptocompare.
Bank of Japan expected to keep interest rates on hold after landmark hike
The Bank of Japan is set to leave its short-term rate target unchanged in the range between 0% and 0.1% on Friday, following the conclusion of its two-day monetary policy review meeting for April. The BoJ will announce its decision on Friday at around 3:00 GMT.