Gold could decline if Fed drops ‘patient’ – FXStreet

FXStreet (Barcelona) - FXStreet Editor and Analyst, Omkar Godbole, shares the outlook for Gold into the FOMC meeting, expecting the precious metal to drop to USD 1120-1100 if Fed drops ‘patient’, while failure to do so might lead Gold to see USD 1175 levels.

Key Quotes

“Gold prices are likely to dip to USD 1120-1100 levels if the Fed drops the word ”patience”. However, fresh demand for the yellow metal could be seen at USD 1120-1100 levels as the dropping of the word patience is likely to be accompanied by a downward revision of the growth forecasts and a indication of slower rate hikes.”

“On the other hand, the metal could rise to its 5-WMA at USD 1175 in case the Fed surprises markets by retaining the word “patience” in its forward guidance. However, gains are likely to be capped at the same as equities could rally in this case.”

“On weekly charts, the metal is moving in a channel, with prices about to test the lower end of the channel at USD 1120 levels. The weekly RSI too has breached the trend line support.”

“Meanwhile, the hourly chart shows, the gains are being capped at the 50-MA, currently at USD 1151.6, since the beginning of the week. The hourly and the 4-hour RSI also favors further downside in the metal.”