Gold has been trading in a range of $1,350 to $1,440 for a few days. Previously, the price had been quite impulsive and non-volatile amid the bullish trend. Despite its status of a safe haven asset in the time of economic turbulence, gold failed to sustain the bullish pressure it acquired earlier.
Gold rose recently after the US Federal Reserve indicated that it is ready to cut interest rates despite a strong US jobs report released on Friday. Fed Chairman Jerome Powell said overnight that the central bank “will act as appropriate” to spur slowing business investments and tackle with growing economic uncertainties. Gold investors are betting on the rate cut at the nearest policymeeting. Such mounting likelihood pushed gold prices above $1,400 an ounce after Powell’s testimony recently on business and economic conditions to the House Financial Services Committee.
Powell’s testimony came ahead of a key event awaited by gold investors: release of the June meeting minutes of the Federal Reserve that would give an insight on why the central bank avoided a rate cut last month and how things could be different this time. Investors have rushed into gold over the past two months, pushing the yellow metal from $1,200 to $1,400 as specualtions on a rate cut came into play. A rate cut is bearish for the US dollar and bullish for gold. In fact, the Dollar Index, which tracks the greenback’s strength against a basket of currencies, fell 0.4%, its sharpest intraday drop since June 21.
From the technical viewpoint, gold has been quite impulsive with the recent bullish pressure which pushed the price above $1,410. Moreover, the price is expected to climb towards $1,440 in the coming days as the dynamic level holds the price as support. Gold is likely to extend the bullish trend. On its path higher, the price could reach the target level of $1,500. A break above $1,440 with daily close is required for further upward pressure to build up.
SUPPORT: 1,350, 1,400, 1,410
RESISTANCE: 1,440, 1,450, 1,500
The material has been provided by InstaForex Company – www.instaforex.com