Gold prices are increasing for the second time this month, prolonging the rebound that began on Monday when the pair fell to $1741, the lowest number in more than a month. The gold-to-dollar exchange rate reached new highs of little more than $1780 before easing somewhat.
In the very near run, the XAU/USD pair maintains a bullish stance, but it must break over $1780 to pave the way for more increases. The next level of resistance is likely to be $1785, followed by $1795 (20-day simple moving average). On the negative, $1766 is the significant support level right now. A pullback below $1760 could strengthen the negative pressure, which should lead to another challenge of the 1745/50 resistance level.
On Tuesday, the market rebounded before the FOMC’s announcement on interest rates even though investors’ fears remain dominant in Wall Street. The Federal Reserve is not anticipated to adjust interest rates. The central bank may brace the markets for a reduction in the size of its asset acquisition operation. On Tuesday, the yield on the 10-year Treasury note remained flat. The yield on the 10-year Treasury note reached a high of 1.346 percent before falling to 1.314 percent. The Federal Reserve’s announcement might cause significant swings in the bond market, which would result in increased instability in the price of Gold.
Overview of the Technical Aspects
XAU/USD CHART. Source: Tradingview.com
Spot gold reached a record high of $1,781.75 per troy ounce and is presently selling at approximately $1,775. The gold-to-dollar exchange rate is moving just above the 61.8% regression of the March/June rise, with the nearest support line near 1,769.10. This is illustrated on the daily chart, where the pair continues to trade under all of its moving averages, with the 20 SMA moving south underneath the longer ones and across the next Fibonacci retracement. In the meantime, chart patterns have regained, but they remain in the negative territory, implying a lack of interest in purchasing.
However, per the 4-hour chart, the threat is tilted to the upside in the short future, with only a limited amount of bullish possibility remaining. The metal has progressed beyond its 20 SMA, which has now become flat, but it continues to trade underneath the 100 and 200 SMAs, which have maintained their bearish slopes. The Momentum marker has turned flat after passing into new highs, indicating a neutral position, whereas the RSI indicator is moving forward at around 56 points. Bulls will have a greater chance if gold can break through 1,785.40, which serves as an instant resistance level.
Support levels are as follows: 1,769.10, 1,754.20, and 1,742.00. Levels of resistance: 1,785.40, 1,796.90, and 1,806.70.