Gold Breaks Above The $2000/ounce Mark Ahead Of The Fed Rate Decision.

The Gold Spot Prices (XAUUSD) are trading flat on Wednesday morning after rallying over 1.72% in the previous session as the concerns of a re-emerging banking crisis and signs of softening US economy gripped investor sentiment ahead of the conclusion of the two-day FOMC meeting later today.

Investors are concerned that the signs of weakness in the US job market could indicate a looming broader economic slowdown. A rate hike could exacerbate the effects of the slowdown, pushing the economy closer to a possible recession. The CME FedWatch Tool reports that the cash market is pricing in an 89.3% probability for a 25-basis point rate hike later today, down from the 93.2% a day before.


The 4H chart shows that the non-yielding is trading within a range higher after the price action found support at the $1973.59/ounce price level. The current sentiment of a potential banking crisis and recession has helped the price action break above the 23.60% Fibonacci retracement level and the $2000/ounce mark as the bulls look to re-take the $2015.95/ounce resistance level. The re-capture of the $2031.98/ounce resistance level would entice the bulls to target the $2015.95/ounce as the next level of significance. However, the bulls would need intensifying fears of a potential recession and dovish comments from the Fed to support a move towards the $2049.20/ounce.

However, for the bearish sentiment, the bears would need to push the price below the 50-day moving average and 23.60% Fibonacci retracement level if they look to retest the $1973.59/ounce support level. However, the precious yellow metal would need economic indicators and a strengthening US dollar to support a breakout towards the $1950.05/ounce support level.


The market is firmly focused on the Fed’s interest rate decision later today, with the ISM services PMI acting as sort of a curtain-raiser before the main act. However, with the market firmly concerned with a potential recession and fears of a re-emergence of strain on the banking sector, the non-yielding bullion is poised for some increased volatility during the trading session. Nevertheless, a breakthrough on either the $2031.98/ounce resistance level or the $1973.59/ounce support level could determine the direction of the non-yielding bullion in the short term.

Sources: TradingView, Reuters, MT Newswire.

DISCLAIMER:This report has been prepared by our Group company. This document is not intended as an offer, solicitation or recommendation to buy or sell financial instruments or to make any investment. The Group has used reasonable efforts to obtain information from reliable sources and the report is provided without representation or warranty of any kind (neither expressed nor implied).  The Group disclaims liability for any publication not being complete, accurate, suitable and relevant for the recipient. Specifically, the Group disclaims liability towards any user and other recipients of this report.