Gold Trades Bearish Ahead of FOMC – Double Top in Focus

During the early European session, gold prices reversed the three consecutive sessions of gains as the dollar is suddenly getting strong ahead of FOMC statement today. However, the precious metal is still trading in a narrow trading range of $1,301 – $1,310.

But be very careful as this trading range is very likely to be violated on the release of FOMC statement and Fed Fund Rate. Here’s what to expect.

The US Federal Reserve Monetary Policy decision is due to release at 18:00 (GMT) and it can influence the global markets. At the moment, investors are pricing in a dovish policy sentiment, which is why the US dollar can stay under pressure. So fundamentally, gold should stay supported ahead of the news release today.

Gold’s Technical Analysis

On the 3-hour chart, gold has tested $1,311 a couple of times, making this level a double top. For all the beginners, the double pattern is known for a bearish reversal. But at this point, we can’t say much about it as the FOMC statement is a boss today and will be a trendsetter for the rest of the week.

As we spoke earlier, gold is trading below a solid resistance level of $1,310 and the violation of this can bring more buying in the bullion market until $1,315 and $1319. Whereas, the support prevails at $1,300 and a drop below this can lead to gold prices towards $1,293.

Support Resistance
1303.19 1310.41
1299.85 1314.29
1292.63 1321.51
Key Trading Level: 1307.07

GOLD – XAU/USD – Trading Idea

Consider selling below $1,307 with an initial take profit of around $1,301. Whereas, buying should be preferred above a psychological trade level of $1,300.

Good luck!