Gold Price Forecast – Gold Quiet Ahead of the FOMC
Gold markets have been relatively quiet during the trading session on Tuesday as we await the FOMC decision on Wednesday. Ultimately, this is a market that will move back and forth with the US dollar, so therefore it should not be a huge surprise to see it relatively directionless. From a longer-term standpoint though, it certainly does look as if the 200 day EMA underneath at the $1822 level has been supportive and will more than likely continue to be. The choppy behavior over the last couple of days should not be a huge surprise, as we are essentially stuck between the 50 day EMA and the 200 day EMA, which typically means a lot of back and forth.
Gold Price Predictions Video 27.01.21
If we can break above the 50 day EMA which is just above at the $1870 level, then it is likely that gold will go looking towards the $1900 level. This is probably the base case scenario, simply because Jerome Powell will not want to do anything to upset the financial markets to the downside, the $1822 level probably continues offer support. Even if we broke below there, I think that the $1800 level comes into play for support, followed by the $1750 level. If we were to break down below there, then I would anticipate that gold would sell off quite drastically.
The US Dollar Index is testing relatively extreme lows, so a bounce in the US dollar could be somewhat negative for the gold market, but at this point in time it is but a sideshow as we will have to wait to see what the Federal Reserve is about to say.
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This article was originally posted on FX Empire
