The decision of the FOMC meeting earlier today has saved the value of gold from falling into a deeper valley.
After the Federal Reserve (Fed) decided to raise interest rates by 25 basis points to 5.00%, investors digested the dovish signal that was delivered by Chairman Jerome Powell.
Interest rate hikes are likely to be raised only once more until the end of 2023 signaling the end of the tightening phase, but the central bank will not implement interest rate cuts.
The situation that led to the decline of the US dollar has had a positive effect on gold asset trading which has increased again.
On the XAU/USD chart which measures the value of gold against the US dollar observed yesterday, initially the price has fallen below the 1950.00 level and slowed down around 1935.00.
However, after testing the 1950.00 level, the price finally surged due to the market reaction to the results of the FOMC meeting, reaching a height of 1978.00.
With the surge and also the price movement that has been above the Moving Average 50 (MA50) support level on the 1-hour time frame on the XAU/USD chart gives a bullish signal for gold.
The price is seen to return to the focus level of 2000.00 reached earlier this week which is still an obstacle for gold.
If successfully broken through, the next target is to reach the height of 2070.00 which was last touched in February 2022 trading.
But if the situation changes, it is not impossible that investors will see the price of gold plunge again at the end of this week.
A drop back below 1950.00 and above the MA50 support would signal a bearish trend reversal.
Next, the price will go down towards the previous concentration level around 1900.00 to 1870.00.
