Gold Reaches Three Weeks’ High – Dovish FOMC in Play
Arslan Butt • 1 min read
On Thursday, the precious metal gold soared to a three-week high as the US Federal Reserve signal no chances of any interest rate hike this year. Whereas, a surprise decrease in the US growth outlook appended to concerns on global economic slowdown.
In response, the market triggered the safe-haven appeal. The Fed came out with a much more cautious statement than the market was expecting. There was a dramatic move in gold on the upper side as the metal jumped from $1,300 to $1,318 in just a few minutes.
Conversely, the negatively correlated dollar took a significant hit and the dollar index shifted beneath $96 for the first time this month.
GOLD – Technical Outlook
On the technical side, gold is trading near $1,319 resistance area. The leading indicators are in the overbought zone but the candlesticks are still signaling a strong bullish bias. That’s the reason why we didn’t open any signal yet.
XAU/USD – 3 Hour Chart
On the upper side, the violation of $1,319 can extend bullish rally until $1,326 trading level. If this happens, I would prefer to take a sell trade below $1,326. Otherwise, the idea will be to stay bullish above $1,311 today.