Gold establishes above $2000; Fed verdict eyed for direction signal
Gold is trading within a narrow consolidation near new highest level in almost three weeks, following nearly 1.8% rally on Tuesday, as traders stay aside, awaiting announcement from FOMC, on conclusion of two-day policy meeting.
The metal price was supported by fresh uncertainty over the economic outlook, darkened by weakening economic data and increased stress in banking sector which boosted safe-haven demand, while the action was limited by mixed expectations about Fed’s stance.
The 25 basis points hike is very likely, but more interesting will be the central bank’s decision about the action in coming months.
Scenario in which the Fed will signal a pause in policy tightening after today’s hike, would lift gold price, as pause in tightening campaign would be triggered by weakening economic growth and deepening banking crisis.
Conversely, hawkish Fed’s stance would offer fresh support to the dollar and reduce demand for bullion.
Bullish near-term bias would persist if the price sustained gains above psychological $2000 level that would open way for retest of 2023 high at $2048 and bring in focus record highs at $2074/70.
Res: 2032; 2048; 2070; 2074
Sup: 2000; 1995; 1978; 1969