SPOT GOLD holds in narrow consolidation after heavy losses, awaits FOMC minutes
Spot Gold is trading within narrow consolidation above one week low at $1325 as traders await release of FOMC minutes later today.
The yellow metal fell sharply on Tuesday, driven by stronger dollar, making the strongest one-day fall since 06 Feb.
Today’s extension lower cracked important support at $1328 (Fibo 61.8% of $1307/$1361 upleg), but was so far unable to clearly break lower.
Daily 10/20/30 MA’s in bearish setup and 14-d momentum heading south in the negative territory are supportive for further weakness, as yesterday’s long red candle weighs.
Close below $1328 is needed to generate fresh bearish signal for extension towards $1320 (Fibo 76.4%) violation of which would unmask key near-term support at $1307 (08 Feb trough).
FOMC minutes are expected to give fresh signals about the pace of Fed’s rate hikes in 2018, with hawkish tone expected to further inflate the greenback and increase pressure on gold.
Alternative scenario requires firm break above the cluster of daily MA’s between $1334 and $1336 to ease immediate downside pressure and signal stronger retracement of $1361/$1325 bear-leg.
Res: 1331; 1334; 1336; 1339
Sup: 1325; 1320; 1317; 1314