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Gold Reaches Three Weeks’ High – Dovish FOMC in Play

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.

Good luck!

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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