Gold Price Forecast – Sideways Trading In-Play, FOMC Meeting Minutes!

During Wednesday’s Asian trading session, the precious metal gold failed to extend its previous-day winning streak and drew some offers around below the $1,865 level as buying bias surrounding the greenback, backed by the risk-off market sentiment, turned out to be one of the key factors that kept the bullion prices under pressure as the price of GOLD is inversely related to the price of the U.S. dollar.

The losses in the U.S. dollar could be short-lived as expectations over the low-interest rates tend to undermine the American currency, which may help gold prices to limit their deeper losses. In the meantime, the renewed optimism over the highly infectious coronavirus disease vaccines also played its major role in weakening the safe-haven gold prices. Furthermore, the losses  were further bolstered after the lead drug-makers like Pfizer and Moderna signaled to have found the cure for the Indian variant of the virus, which initially favored the market sentiment and contributed to the traditional safe haven losses. On a different note, the intensifying doubts concerning the Fed’s next move, amid downbeat Housing data and the ever-increasing coronavirus (COVID-19) numbers in Asian countries keep weighing on the marker trading sentiment, which may help the safe haven gold prices to limit their deeper losses.

Additionally, the ongoing geopolitical tension from the Middle East is exerting some additional downside pressure on the market trading sentiment, which was seen as one of the key factors that kept the lid on any further losses. As of writing, the yellow metal prices are currently trading at 1,864.61 and consolidating in the range between 1,864.61 and 1,871.52.Despite the continued vaccine and stimulus hopes, the market trading sentiment failed to extend its previous-day recovery moves and turned depressed on the day. However, the global equity market losses were fully sponsored by the ever-increasing virus fears from India, Japan, and Brazil, which keep fueling the doubts over the global economy’s recovery. Apart from this, the reason for the downbeat trading mood could also be associated with the long-lasting Israel-Palestine tussle, which is still not showing any sign of slowing down. Meanwhile, Japan seems doubtful to remove the emergency measures in May, which exerts additional downside pressure on the mood. All these factors have been weighing on the market trading sentiment and were seen as significant factors that kept the U.S. dollar prices higher.

At the USD front, the broad-based U.S. dollar managed to stop its previous day bearish bias and drew some fresh bids on the day as the market risk-off mood tends to underpin the safe-haven demand the greenback. However, the gains in the U.S. dollar could be temporary as hopes that U.S. interest rates will remain low probes the bulls. It is worth mentioning that the minutes from the U.S. Federal Reserve’s recent meeting are due later on the day. Looking forward, the market traders will keep their eyes on the release of FOMC minutes. In addition, trade/political headlines will also be closely observed.

S3 1845.44
S2 1857.31
S1 1863.26
Pivot Point 1869.19
R1 1875.14
R2 1881.06
R3 1892.94

On the technical front, GOLD is trading strongly bullish at 1,870 level. On the higher side, gold is likely to face resistance at 1,876 level and support at 1,864. The 4-hour timeframe has closed an upward channel supporting bullish bias and suggesting increasing bullish trend continuation. The indicators like RSI and MACD support a bullish trend. Therefore, we should consider taking a buying trade over 1,865 level and selling trade below the same. Good luck!