The precious metal gold finally gained support near $1242 as the market has already "priced in" the US interest rate hike and hawkish FOMC. Additionally, investors aren't expecting another rate hike seeing as the US inflation figures don't justify a third rate hike in a single year.

Due to the negative correlation between gold and the US dollar, the rate hikes statement was supporting the Buck, which ultimately resulted in weaker gold prices. Now, as the expectations for a rate hike are getting weaker, we can expect a slightly bullish trend in the gold.

Evans, the Chicago Fed President, made a balancing remark when he said it could make sense to hold an additional rate hike before December. Evans' speech was followed by another FOMC member, Dudley, who sounded quite hawkish and confident about the US economic growth in his speech. This caused the gold to remain under selling pressure. Here is an informative article to refer to in order to learn more about Gold Trading.   

Forex Trading Signal – Idea

I'm considering entering a long term position to catch approximately 150 points in gold. The idea is to enter a buy position above $1242 with a stop loss below $1238 and take profit at $1254 & $1261. Don't forget to drag the stops at the breakeven price once the market shows green pips.

Gold – Bullish Channel – Daily Chart 

Technical Outlook

Undoubtedly, the technical side of the gold is densely bearish. On the daily chart, 20 & 50 period moving averages are implying a bearish trend in the gold.

As discussed in our previous report, the precious metal has completed 61.8% Fibonacci retracement which is extending a strong support at $1243.

For now, we can see a bullish channel in the gold's daily chart. The yellow metal is consolidating right above the trendline support level of $1242. The RSI & Stochastic have entered the oversold region, which emphasizes that the selling trend is getting weaker and a buying trend is imminent. Let's see if the market shows a reversal or continues to the downward trend.