Gold Price Predictions “After FED Decision” by Analyst!

According to market analyst Christian Borjon Valencia, the gold price stopped its recovery from the Fed-induced blow on Thursday as the confluence of the 21 and 50-Day Moving Averages at $1,780 appeared to be a tough hurdle for the bulls to break. The analyst states that the recovery in US Treasury rates and the optimistic market mood combined with the dollar control the recovery of gold from a three-week low of $ 1,759.

How did the market react after the Fed decision?

Gold rose 0.44% at the start of the Asian session and was trading at $1,776 at the time of writing. cryptocoin.com As we have also reported, on Wednesday, the Federal Reserve decided to keep interest rates unchanged in the range of 0-0.25. In addition, the Fed announced that it will reduce the pace of its bond purchases by $15 billion per month until the first half of 2022. Gold price reacted to the downside to this statement, falling to $1,759 but eventually found some buying pressure to settle around $1,770. As the yellow metal moves south, he says, as long as it stays below $1,770, it will push the 100-day moving average keeping the USD bulls in check.

Wednesday’s focus was the Fed. In its monetary policy statement, the US central bank noted that high inflation pressures are temporary (maintains its stance) and added that supply and demand imbalances contributed to the rise in prices. Despite the jump in inflation, the Fed sees an improvement in economic activity and is observing progress in the labor market. Regarding the bond-buying program, the Fed said they “will begin to contract later this month with discounts of $10 billion in treasury purchases and $5 billion in MBS.” It’s worth noting, meanwhile, that the Federal Reserve has left the door open for QE rate adjustments:

Comparable tapering in purchase speed probably seems reasonable every month. But we are ready to adapt if necessary.

Gold also supports Fed Chairman Jerome Powell’s patient stance on raising interest rates after he retested the $1,760 area in the central bank’s tapering announcement a day ago. The analyst emphasizes that the post-Fed recovery in gold prices could only gain momentum with a sustained move above the $1,780 barrier, with little expectation of any momentum from the US weekly jobless claims data to give the gold bulls any momentum.

Gold price technical view: Downward trend is declining

Analyst Christian Borjon Valencia states that on Wednesday, the gold price action acted like a seesaw in the $29 range, reaching a daily low of $1,759 before settling in current levels. He provides the following analysis on the daily chart:

The daily moving averages (DMAs) stay above the spot price. But there is a horizontal trend that depicts the bottom with a flat slope. Also, the yellow metal is approaching the above-mentioned levels, showing that the downside trend is waning. However, a clear upside break above the 200-day moving average (DMA) above $1,800 could keep the gold bulls in check. Based on this result, the resistance area below will be an empty path towards the July 15 high of $1,834 and then $1,900.

Conversely, if the dollar bulls want to stay in control, the analyst states that prices should be kept below the 200-DMA and continues his technical analysis as follows:

Based on this result, the first area of ​​support will be the November 3 low of $1,759. A break of the latter would reveal an ascending trend line that moves from the August 9 lows to the September 29 lows, around the $1,740-50 area.

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