Gold Trades on Bullish Footing – Weaker Dollar Underpins 

Gold prices closed at $1495.60 after placing a high of $1496.55 and a low of $1481.11. The overall movement of Gold remained bullish that day. On Wednesday at 17:15 GMT, the closely watched ADP Non-Farm Employment Change from the United States came in as expected at 125K.

At 17:30 GMT, the Advance Quarterly GDP of the US showed growth at 1.9% against the expectations of 1.6%. The GDP price index came in at 1.7% against the expectations of 1.8%. Overall the macroeconomic data was in favor of the US Dollar on Wednesday, and Gold prices fell in the early session ahead of the FOMC meeting and its decision about interest rates.

On Wednesday at 23:00 GMT, the Federal Reserve announced the third rate cut for this year by 25 basis points. Although the decision was highly expected in the market, Federal Reserve also  signaled that it would now pause its rate reductions.

In a widely expected move of cutting its rates for the third time in a year, the Federal Reserve also indicated that further monetary easing would be paused for now, and a more “wait-and-see” approach would be adopted to assess the suitable path forward.

With the statement of pausing further monetary easing by Fed Chair Jerome Powell, the chances for December rate cuts are highly unlikely, unless impending economic risks get worse.

The US Dollar Index suddenly climbed to a high of 97.8 after the announcement of a rate cut by 25 basis points from the Federal Reserve. The increase in US Dollar weighed on the yellow metal prices.

However, traders adjusted to the news of hawkish Cut by fed and started buying Gold after realizing the negative effect of a rate cut on the US dollar.  Gold has been moving in a bearish trend for two days amid the optimism raised after US-China partial deal and Brexit extension grant. But on Wednesday it showed a bullish trend after the third rate cut by the Fed.

GOLD – XAU/USD – Technical Levels

Support Resistance

1485.63 1501.21

1475.6 1506.77

1460.02 1522.36

Key Trading Level: 1491.19

Gold – XAU/USD – Forex Trading Signal

The precious metal gold has already violated the triple top resistance level of 1,494. Closing of hourly candles above 1,494 confirms the violation of the level, and technically, Gold should continue to trade bullish until 1,503 and 1,507. In case, Gold decides to trade bearish, the very first hurdle on the lower side is likely to be at 1,494 where the bearish breakout can extend sell-off until 1,483 area.

Good luck!

ABOUT THE AUTHOR See More

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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