The price of GOLD (XAU/USD) rose to a six-week high of $1,937 before experiencing a corrective dip during the Asian trading session. Despite the temporary decline, GOLD remains attractive due to growing fears of international banking trouble caused by the recent Credit Suisse debacle and tension over the Federal Reserve’s interest rate decision next week.

During the Asian trading session, the US Dollar Index fluctuated within a tight range of 104.60, with the effect of the banking sector upheaval on the Dollar Index fading. Investors are beginning to underestimate the likelihood of a change in monetary policy at next week’s meeting, with the CME FedWatch tool indicating that the probability of a 25 basis point rate hike by Federal Reserve Chair Jerome Powell is now greater than 70%. However, 30% of the population is likely to support keeping interest rates the same.

Technical analysis shows that the price of GOLD corrected lower following a downward divergence on a two-hour time frame, indicating a loss of upside momentum. However, as the asset has not yet breached the higher high higher low pattern, the upside bias remains solid. The price of GOLD has reverted back toward its 20-period EMA, currently around $1,915, after moving perpendicularly.

 GOLD is currently trading at around $1,900.00, well beyond the 61.8% Fibonacci retracement level (calculated from the high of $2,059.80 on February 2nd to the low of $1,805 on February 28th).