Gold Falls Sharply, Pricing Out Fed Rate Decision Plays
The safe-haven metal prices slipped after the United States Federal Reserve monetary policy meeting. Gold placed a low of around 1,485 as investors priced out the sentiments of a December rate hike.
The drop came following the Federal Reserve meeting, which delivered the expected rate cut during the session. Notably, this was the second rate cut during 2019.
President Donald Trump tweeted after the rate cut and said the Federal Reserve has failed to deliver. Moreover, the continuing trade war with China and slowing global economic growth will affect the United States economy.
President Trump tweeted:
“Jay Powell and the Federal Reserve Fail Again. No ‘guts,’ no sense, no vision! A terrible communicator!”
The US dollar index that often moves in the direction which is opposite to gold, initially increased after the Feral Reserve statement, but is currently flashing red, ultimately driving a bullish trend in gold.
GOLD – XAU/USD – Technical Outlook
Gold is still maintaining its lower range of 1,485, which is now working as a healthy support level.
Closing of reversal candle above this support zone is suggesting bullish trade opportunity. On the upper side, gold has a probability of going after the 1,500 level.
The RSI and Stochastics are turning into the bullish zone and crossing over 50 levels, suggesting odds of a bullish reversal in gold.
The 50 periods EMA, the one in yellow, may cause resistance at 1,500 level today.
Daily Support and Resistance
S3 1473.08
S2 1486.88
S1 1494.1
Pivot Point 1500.69
R1 1507.91
R2 1514.5
R3 1528.31
Gold – XAU/USD – Trade Idea
I will be looking to open another trade in gold, but this time bearish below 1,500. Below 1,500 level, gold has chances to fall until 1,492 area again.
Good luck!
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