After waiting since the beginning of the week, gold investors were disappointed by the outcome of the FOMC meeting earlier this morning following hawkish -toned statements supporting the strengthening of the US and pushing the value of gold to decline again in the market.
Federal Reserve (Fed) Chairman Jerome Powell has signaled to implement a reduction in bond purchases (tapering) in addition to interest rates expected to be raised next year.
On the XAU/USD price chart which measures the value of gold against the US dollar has seen an initial price surge testing the resistance of 1785.00 in the SBR zone (support become resistance).
Then the price of gold plunged back towards the RBS zone (resistance become support) at 1765.00 before the slow price movement in the zone continued in today's trading (Thursday).
After the price fell back below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame, investors agreed to see bearish movement on the XAU/USD chart until the following week.
The decline will head back to the nearest support level at 1745.00 which still supports the price from the lower decline since last weekend.
A drop below that level will push the expectation that the price of gold will return to the main support zone at 1700.00.
Yet if gold trading manages to absorb the strengthening pressure of the US dollar and rises again, the SBR 1785.00 zone will be tested again over the weekend.
A higher rise for gold’s bullish trend movement will lead to the previous focus level at 1800.00.
Investors will be more vigilant in controlling the risk of trading for gold especially on weekends with any possibility that may occur in the market.
