Sideways movement dominates gold as attention shifts to FED interest rate

The most significant economic events affecting gold movement

Gold prices have seen a noticeable decline since the beginning of trading this week due to an increase in the US dollar index against most major currencies. Close attention is being paid to monetary policy meetings.

Investors' attention is turning to the US Federal Reserve's announcement of the interest rate today at 6:00 pm GMT, followed by the bank's press conference at 6:30 pm GMT, and the subsequent decision on the interest rate. Furthermore, investors are eagerly awaiting statements by Jerome Powell, the Chairman of the Federal Reserve. Expectations are that the Fed will temporarily maintain interest rates, attempting to catch its breath after a long journey of tightening monetary policy and raising interest rates over the past months, in order to evaluate the impact of its policy on the US economy.

On the other hand, Janet Yellen, the US Treasury Secretary, stated that liquidity in the US banking system is readily available. She added that the US economy is strong due to consumer spending, despite slowdowns in other areas. However, she also warned of pressures on the commercial real estate sector. The US Treasury Secretary has predicted that efforts to reduce inflation will continue in the coming years, specifically in 2024 and 2025. The precious metal has slightly risen and is currently trading near $1955 per ounce.

Key technical levels affecting gold trading movement

Gold is currently trading within a wide sideways range, with the resistance level at $1985 representing the upper bound of the channel, and the support level around $1930 serving as the lower bound.

Traders can engage in trading activities within this range by selling at the resistance level or buying at the support level, until the sideways channel is broken.

In the event that gold successfully surpasses the $1985 resistance level, it is likely to experience further upward movement towards the $2000 and $2020 resistance levels.

Conversely, if gold declines from its current levels and breaks below the $1930 support level, this could lead to additional downward pressure, with a potential test of the $1900 support level. Should this level also be breached, the decline may extend to the $1885 level.