Gold Price Forecast: Trading Zone $1803—$1758, Focus Shifts To Fed

Gold Price Forecast: Gold rebounded on Monday after finding support just under $1770, tracking the late decline in the US dollar across the board after Wall Street indices closed at record highs.

Earlier in the day, gold slipped as weaker US Durable Goods data lifted the safe-haven demand for the greenback while an uptick in the Treasury yields also drove the buck higher. Expectations of improving global economic outlook in the coming quarters were marred by concerns over surging covid cases in India, Japan and Brazil. Meanwhile, investors digested the latest updates on US President Joe Biden’s $2.25 trillion infrastructure spending plans.

Markets have turned risk-averse, as the Fed begins its two-day monetary policy meeting later on Tuesday. Further, the worsening covid situation in the emerging economies and a likely tax hike by Biden continue to put fresh bids under the greenback.

Investors would refrain from placing any directional bet ahead of Wednesday’s Fed outcome, which could leave the price of gold in a familiar range. Traders will also take cues from the US CB Consumer Confidence data and sentiment on Wall Street amid upcoming corporate earnings results.

  • Gold moves back and forth in a familiar range below $1803.  
  • Recapturing 21-SMA on the 4H chart to recall the Gold buyers.
  • US dollar recovers amid downbeat mood, focus shifts to the Fed decision.

Gold Price Forecast And Technical outlook

Gold’s four-hourly chart shows that a bull-bear tug-of-war persists, as the price remains trapped between two key averages.

The gold bulls struggle to find acceptance above the 21-simple moving average (SMA) at $1782 while the downside remains cushioned by the upward-sloping 50-SMA at $1778.

The range is getting tighter, implying that a breakout in either direction could be on the cards.

The odds of a potential upside appear higher, given that the Relative Strength Index (RSI) trades in the bullish territory, currently at 51.39.

A sustained break above 21-SMA could fuel a rally towards Friday’s high of $1796, above which the $1803 mark could be probed.

Alternatively, a four-hour candlestick closing below 50-SMA is likely to expose Monday’s low of $1768.

The gold bears could then target the ascending 100-SMA support at $1759. The next crucial cap awaits at the $1750 psychological level.

(Gold Silver Reports / Neal Bhai Reports, India)

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Neal Bhai has been involved in the Bullion and Metals markets since 1998 – he has experience in many areas of the market from researching to trading and has worked in Delhi, India. Mobile No. - 9899900589 and 9582247600

6 thoughts on “Gold Price Forecast: Trading Zone $1803—$1758, Focus Shifts To Fed”

  1. It seems as though the FOMC will stay on track to “increase our holdings of Treasury securities by at least $80 billion per month and of agency mortgage-backed securities by at least $40 billion per month” as the central bank warns of a transitory rise in inflation, and the committee may continue to strike a dovish forward guidance as Vice Chair Richard Clarida insists that “policy will not tighten solely because the unemployment rate has fallen below any particular econometric estimate of its long-run natural level.”

    For quite some time I had highlighted the importance of breaking the key 1760-65 area. Now that the precious metal is above, it does raise the question as to whether now is the time to be bullish on gold. In the short run, it has brightened the outlook, confirming the recent double bottom, however, hurdles remain for gold with the psychological 1800 level and 1833 (61.8% Fibonacci retracement) ahead. That said, prior resistance now support is at 1760-65 and should the precious metal close below 1745 (50DMA) a move to 1700 looks to be back on the cards.

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