Our sell position in gold was doing pretty great but unfortunately missed our take profit by inches and reversed over a range of technical and fundamental reasons. The investors are keeping their funds into gold, ahead of the US Federal Reserve rate decision.
GOLD prices turned slightly bullish after a dramatic drop in the previous session as traders await a decision from the US Federal Reserve on interest rates. Most of the market feels there is going to be a 25 basis point cut in the interest rate; however, there are also some that expect a 50 base point rate cut. It’s keeping an immense amount of uncertainty in the market. A rate cut typically makes the dollar weaker and improves the gold prices.
Secondly, Russia’s gold reserves surpassed the $100 billion milestones in July as gold rates increased and the country’s central bank extended to buy the yellow metal. Physical buying and increasing reserves by countries always boosts the demand for the precious metal.
Key Trading Level: 1426.17
Gold is facing strong support around $1,415 along with resistance at $1,428. We may see gold trading within this range until we see a breakout. On the lower side, a breakout of $1,415 can lead to gold prices towards $1,405/01. While bullish breakout can extend rally until $1,440.
I won’t be taking any trades until we have a clear trend in the market. Good luck and stay tuned!