Gold price talk points
The gold price will consolidate before the Federal Reserve’s interest rate decision on 28 July, as the central bank is expected to maintain current policies, but a change in future monetary policy guidelines could create headwinds for bullion if the central bank shows greater willingness to withdraw from emergency measures.
The outlook for the price of gold depends on the guidelines for the transfer of the Federal Reserve
The price of gold is trying to maintain a lower monthly level ($ 1,766) after climbing back to the 50-day SMA ($ 1,833)but more the same Federal Open Market Committee (FOMC) may support the precious metal, as the recent rebound in the US Treasury Department ‘s longer – term returns appears to be rare.
Semi-annual certificate of the year The chairman Jerome Powell Recommends that the FOMC not rush to change gears, as the head of the central bank tells US legislators that “achievement of the standard “significant progress“ is still awayAnd the central bank may try to buy time before the quarterly meeting in September, if Powell promises “Notify notifications well in advance to reduce the pace of purchases. “
As a result, the Fed’s decision to keep US yields under pressure as if the central bank was on the right courseincrease its Treasury securities by at least $ 80 billion a month and agencies’ mortgage-backed securitiessecurities of at least $ 40 billion per month, But references to a threatening exit strategy may drag on with bullion, as Fed officials predict two interest rate hikes by 2023.
That being said, the price of gold may move in its own drum beat before the Fed’s interest rate decision double bottom formation it seems to have been on its way since the beginning of this year, and the momentum will not be able to rise above the 50-day SMA ($ 1,833) may keep the precious metal within a specified range as the recent rebound in US longer-term yields appears to be normal.
Gold price chart
Source: Trading View
- Remember, a A double bottom emerged in March as the price of gold failed to test the lower level of June 2020 ($ 1,671), with the main reversal pattern rejecting the precious metal in the 200-day SMA ($1822) for the first time since February.
- At the same time it is Relative Strength Index (RSI) was pushed into overbought territory for the first time since July 2020 as the price of gold seemed to be on track to test for the January elevation ($ 1959), but the double bottom formation appears to have followed its path as the RSI no longer follows the upward trend earlier this year.
- In turn, the price of gold seems to have turned around before $ 1837 (38.2% retrospectively) up to $ 1,847 (100% expansion) No momentum needed to get back above the 50-day SMA ($ 1,833), but need a break / close $ 1,786 (38.2% expansion) start to bring Fibonacci overlaps at about $ 1743 (extension 23.6%) to $ 1763 (50% retracement)on the radar.
– Written by currency strategist David Song
Follow me on Twitter at @DavidJSong