Gold Price Prediction: Ascending Triangle Pattern, FOMC & Fund Fund Rate Ahead

 GOLD prices closed at 1730.05 after placing a high of 1740.15 and a low of 1724.50. They edged lower on Tuesday amid the stronger US dollar as traders were awaiting policy signals from a two-day US Federal Reserve meeting despite poor than expected macroeconomic data from the US. The US Federal Open Market Committee’s two-day meeting will end on Wednesday. After this meeting, the central bank is expected to repeat its pledge to keep interest rates near-zero level until the full employment goals are met.

On Tuesday, the benchmark 10-year Treasury yield note surged to 1.62%, its one-year highest level, and also supported the US Dollar Index that rose by 0.1% for the day. The rising Treasury yields and the US dollar resulted in adding more pressure on the non-yielding bullion, and thus, the yellow metal declined on Tuesday. The US Federal Reserve’s easy policies have come under the spotlight with the rise in interest rates and a rebounding economy. This has raised the question that when will the US Federal Reserve consider unwinding these easing policies. After a two-day meeting of FOMC, Fed Chair Jerome Powell is expected to give a press brief in which he could be asked about this matter.

However, it is unlikely that Powell will be specific about such comments, but his statements will definitely impact Treasury yields that could affect the stock market. Any clues by Powell on how soon the Fed might consider raising interest rates and paring back its bond purchases could dictate the market’s trend. Ahead of all these developments, the US dollar remained higher on board and kept the yellow metal prices under pressure on Tuesday.

On the data front, at 01:00 GMT, the TIC Long Term Purchases dropped to 90.8B against the expected 107.3B and weighed on the US dollar, and capped further losses in gold prices. At 17:30 GMT, the Core Retail Sales for February also dropped to -2.7% against the expected 0.2% and weighed on the US dollar and limited the downward momentum in gold. In February, the Retail Sales also declined to -3.0% against the expected -0.5% and weighed on the US dollar and capped further losses in gold. In February, the Import Prices raised to 1.3% against the expected 1.1% and supported the US dollar and added losses in the yellow metal.

At 18:15 GMT, the Capacity Utilization Rate for February dropped to 73.8% against the expected 75.6% and weighed on the US dollar that ultimately capped further losses in gold prices. In February, the Industrial Production also declined to -2.2% against the expected 0.4% and weighed on the US dollar that kept gold prices supported. At 19:00 GMT, the Business Inventories for January remained flat with the expectations of 0.3%. The NAHB Housing Market Index also dropped to 82 against the expected 84, weighed on the US dollar, and capped further losses in the safe haven metal.