GOLD record increase after FED's decision
Updated
FORECAST - 
XAUUSD
- The Fed held borrowing costs unchanged and continued to indicate it would deliver three rate cuts this year
- The dovish policy outlook weighed on the U.S. dollar and yields, boosting gold prices
For context, the FOMC kept borrowing costs at their current levels at its March gathering, reaffirming its intention to implement 75 basis points of easing in 2024. Wall Street, fearing a hawkish outcome in the face of growing inflation risks, breathed a sigh of relief at the institution’s restrained response.
While there were some hawkish elements in the Fed’s guidance, such as the upward revision to the long-run equilibrium rate, traders chose to focus on the near-term future and the fact that the easing cycle is inching closer and looming on the horizon.
With all that said, the main takeaway from the FOMC meeting was this: nothing has really changed for the central bank; plans to cut rates this year remain on track and the process to slow the pace of quantitative tightening is rapidly approaching, with Powell saying tapering could start “fairly soon”.
Taking into account today’s developments, bond yields will struggle to move much higher in the near term, especially if incoming economic data starts cooperating with policymakers. This could prevent the U.S. dollar from extending its rebound in the coming days and weeks.
Meanwhile, risk assets and precious metals such as gold and silver could be better positioned to maintain upward momentum heading into the second quarter.
XAUUSD FORECAST - TECHNICAL ANALYSIS
Gold surged on Wednesday, breaking past its previous record and notching a new all-time high above $2,220. With bulls seemingly in control of the market, a potential move towards trendline resistance at $2,225 is conceivable. On further strength, a rally above $2,250 cannot be ruled out.
Conversely, if sellers stage a comeback and pullback, support looms at $2,195, the swing high from early March. Below this level, attention will turn to $2,150, followed by $2,090. Bulls must vigorously defend this technical floor; failure to do so will expose the 50-day simple moving average at $2,065.
Resistance price ranges to note: 2225 - 2201 - 2189 - 2180 - 2175
XAUUSD - The Fed held borrowing costs unchanged and continued to indicate it would deliver three rate cuts this year
- The dovish policy outlook weighed on the U.S. dollar and yields, boosting gold prices
For context, the FOMC kept borrowing costs at their current levels at its March gathering, reaffirming its intention to implement 75 basis points of easing in 2024. Wall Street, fearing a hawkish outcome in the face of growing inflation risks, breathed a sigh of relief at the institution’s restrained response.
While there were some hawkish elements in the Fed’s guidance, such as the upward revision to the long-run equilibrium rate, traders chose to focus on the near-term future and the fact that the easing cycle is inching closer and looming on the horizon.
With all that said, the main takeaway from the FOMC meeting was this: nothing has really changed for the central bank; plans to cut rates this year remain on track and the process to slow the pace of quantitative tightening is rapidly approaching, with Powell saying tapering could start “fairly soon”.
Taking into account today’s developments, bond yields will struggle to move much higher in the near term, especially if incoming economic data starts cooperating with policymakers. This could prevent the U.S. dollar from extending its rebound in the coming days and weeks.
Meanwhile, risk assets and precious metals such as gold and silver could be better positioned to maintain upward momentum heading into the second quarter.
XAUUSD FORECAST - TECHNICAL ANALYSISGold surged on Wednesday, breaking past its previous record and notching a new all-time high above $2,220. With bulls seemingly in control of the market, a potential move towards trendline resistance at $2,225 is conceivable. On further strength, a rally above $2,250 cannot be ruled out.
Conversely, if sellers stage a comeback and pullback, support looms at $2,195, the swing high from early March. Below this level, attention will turn to $2,150, followed by $2,090. Bulls must vigorously defend this technical floor; failure to do so will expose the 50-day simple moving average at $2,065.
Resistance price ranges to note: 2225 - 2201 - 2189 - 2180 - 2175
Note
Gold prices rose after the Fed's decision and the decline in the US dollar and yields. The indication of three rate cuts this year is negatively affecting the dollar. To understand the Fed's monetary policy outlook, traders should closely follow Chairman Powell's press conference. However, today's reaction may change due to the upward revision of the long-term equilibrium rate.Note
Gold continued its bullish run after Wednesday’s FOMC meeting provided the catalyst. Bullish continuation was something highlighted in the previous gold update, as long as prices consolidated above the prior all-time high of 2146.80 – which they had.Note
Note
World gold spot price is around 2,165 USD/ounce, down more than 16 USD/ounce compared to the same time yesterday morning.Gold prices on the international market continue to decline because the USD has not stopped its rise. Specifically, the Dollar-Index - measuring the strength of the greenback compared to 6 major currencies, increased sharply by 0.42% to 104,075 points at 6:05 a.m. this morning.
Note
Technically, the next support level for gold prices next week is at 2,145 USD/oz. If it stays above this level, gold prices will likely increase again next week. However, if next week's gold price is pushed below this level, it may adjust to below 2,100 USD/oz, followed by the important support area of 2,041-2,067 USD/oz.The trading plan (reference) for next week will consider buying around 2077 and selling around the 2200 round resistance mark.
Note
World gold prices had a good week of increases due to predictions that they will continue to rise. The US Federal Reserve plans to reduce interest rates, which is expected to start happening from next June.Note
After falling below $2,190 under pressure from a rebound in the USD as Fed official Waller said the Fed was in no hurry to cut interest rates and could maintain current interest rates longer than expected, gold is now rebounding to above. $2,195. USD decreased slightly. DXY fell to 104.34
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