cryptocoin.com As we covered in the news, gold prices experienced a sharp decline after reaching a limit near the record high of $2,075 exactly. However, strategists at Credit Suisse are still waiting for the yellow metal to break from here towards the $2,285/2,300 region.
“Weakness is temporary while gold price is above $1,863”
The long-awaited US central bank (Fed) announced the interest rate decision, and in line with the expectations, the Fed increased the interest rate by 25 basis points. This marked the first time the Fed has hiked interest rates since November 2018. Higher interest rates put pressure on gold prices as they increase the opportunity cost of holding non-yielding bullion. However, strategists at Credit Suisse still seem hopeful for gold. Stratesites makes the following assessment:
The yellow metal capped at a record high of $2,075. However, our guess is that this is a temporary pullback as the 55-day average remains above the $1,863 support level.
Strategists at Credit Suisse highlight the following levels based on their technical analysis:
With initial resistance at $2,120 in front of $2,167 and eventually resistance at $2,285/2,300, our new key upside target, we expect a sustained break above $2,075 in due course.
Gold prices rise after FOMC
Gold prices started the day sideways on Wednesday after falling sharply on Tuesday as U.S. Treasury bonds strengthen near multi-month highs ahead of the Federal Reserve’s rate hike and investors focus on peace talks between Russia and Ukraine.
However, in the evening, the Fed’s interest rate decision was announced in line with expectations and gold prices started to rise after Fed Chairman Jerome Powell’s speech. At the time of writing, spot gold prices were trading at $1,928, up 0.54% on a daily basis. Meanwhile, the Fed signaled 6 rate hikes for the rest of the year. However, a hawkish path direction was made in the Fed’s dot chart, especially for the near term.
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