The gold market in the Asian opening session today was traded quietly before the FOMC meeting scheduled to take place at 2.00 am on Thursday.
Markets are now more likely to expect the Fed to keep interest rates at current levels for the fifth consecutive meeting.
The main focus this morning will be on the summary report of the Fed's economic projections for the second quarter of 2024, where it will reveal whether the current strong US economic data will continue and prompt the Fed to reconsider their intention to cut interest rates and if rates inflation in 2024 still remains above 2.0%.
The market trading scenario at the upcoming FOMC meeting will be seen if the Fed gives a hawkish tone in its speech, it will simultaneously increase the demand for the dollar currency.
And if Jerome Powell's hawkish speech is anything to go by, it is likely to limit market reaction. However, any comments and mixed tone (hawkish/dovish) can trigger very significant market volatility.
Technical Analysis
Based on the daily chart, a "bull-flag pattern" formation has been clearly formed which is currently trading around the $2,156 price level.
If gold is seen to make a significant rise, $2,195 is seen to be a major barrier.
However, if the price level is able to be broken, the price of gold is seen to be able to trade high at least up to the level of $2,250.
While if otherwise, the price level of $2,130 will be tested. If that level is successfully broken, gold is expected to be able to trade lower until the level of $2,110.
