Gold prices reversed direction after recovering to all-time highs. Eren Sengezer of FXStreet reported that the yellow metal is ready to extend its downside correction with a US Federal Reserve (FED) putting out a tough monetary policy. In other words, the analyst thinks that gold may move downwards as a result of the FED’s interest rate meeting, which will take place this week. Here are the details…
Analyst: Gold prices will gain strength if geopolitical tensions increase further
cryptocoin.com As we have also reported, the Fed is expected to start the tightening cycle with a 25 basis point rate hike when the two-day FOMC policy meeting, which will take place on Wednesday, March 16, ends. According to the expert, US bond yields should continue to rise on a hawkish policy outlook and gold should be given weight. On the other hand, although it is less likely scenario, a softer monetary policy from the FED could cause bond yields to turn higher and XAU/USD to rise a foot. The analyst also draws attention to other developments and uses the following statements:
On Thursday, the Bank of England (BoE) will also announce its policy decisions. If GBP/USD rises after the BoE event, the selling pressure surrounding the dollar could help Gold (XAU) / US dollar (USD) rise and vice versa.
What are the expected technical levels?
Investors will continue to look closely at geopolitical headlines, according to analyst Eren Sengezer. Gold has been one of the most sensitive assets to changes in the risk mood and is likely to continue to find demand if tensions continue to escalate, according to the expert. So, which levels should investors follow? The analyst describes the levels he expects in the following sentences:
Daily close below $1,950 (Fibonacci 38.2% retracement level), Gold (XAU)/USD (USD) could test the ascending trendline at $1,940. On the upside, $1,990 (Fibonacci 23.6% retracement level) is aligned as initial technical resistance before $2,000 (psychological level) and $2,010 (static level).
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