Gold will break 2000 mark after Fed meeting
2023.02.01 11:53
Gold will break 2000 mark after Fed meeting
BudriganAnalytics – According to my analysis of the contract’s movements, gold futures remained below $1,950 despite a rise in bullish expectations up until last week, when a breakout above $2000 was expected.
Europe has made a lot of efforts to avoid a recession in the fourth quarter of last year, despite a sharp rise in oil and gas prices and supportive economic growth in this quarter.
After reaching a high of $2,079 on March 3, 2022, gold futures fell, reaching their lowest point of the year on November 3, 2022, at $1,618.60.
Gold futures began an uptrend after establishing a base at $1,622, which was tested three times on Sept. 28, Oct. 21, and Nov. 3, as the fear of a recession grew.
Since January 16, 2023, gold futures have undoubtedly faced strong resistance above $1,932. This is due to the fact that economic data from the first quarter of this year appears to dispel recessionary fears because most major corporations have controlled their spending to maintain profit margins.
The Federal Reserve may raise interest rates by 25 basis points this week, moving them from 4.50 to 4.75, raising expectations for a gradual tightening pace at upcoming Fed meetings. This is despite the sudden increase in gold price volatility this week.
Technically speaking, the weekly candle on the weekly chart is still below the immediate resistance at $1,956 despite a sharp reversal from the weekly low of $1,900.
After the Fed’s decision on interest rates, if gold futures don’t rise above this immediate resistance, a sell-off could occur, which could last until the end of this week.
Even though a small bullish dozy has formed on the daily chart, it is still below the immediate resistance of $1,950. This suggests that selling pressure could increase as soon as the Fed opens its cards tonight.
If there is any change in the pace of hikes during the upcoming meetings of the Federal Reserve, gold futures could see wild price swings on the 15-minute chart following the announcements of interest rate decisions.
If gold futures do not achieve a breakout above $1,956, I come to the conclusion that they may experience severe exhaustion.
Disclaimer: This analysis’s author does not hold any positions in Gold futures. Any position should be taken with caution by readers.
