Technical Analysis: Gold battles seven-week-old resistance ahead of FOMC minutes

Technical Analysis: Gold battles seven-week-old resistance ahead of FOMC minutes

Having probed late January tops the previous day, gold prices remain sidelined near the upper band of an ascending trend channel from March-end amid overbought RSI. Not only the technicals but the pre-FOMC minutes caution also tests gold buyers during early Wednesday. Hence, the yellow metal needs to cross the $1,875-76 immediate hurdle comprising the said channel’s resistance line and late January tops, to extend the recovery moves from March toward the $1,900 psychological magnet. It should, however, be noted that the bullion’s ability to stay firm beyond $1,900 enables it to challenge the yearly top surrounding $1,960.

Meanwhile, the US dollar strength following the scheduled event could trigger the much-awaited pullback of gold prices, towards one-week-old horizontal support near $1,843. However, the metal’s following downside will be capped by the stated channel‘s support line around $1,812. In a case where the gold sellers defy the bullish chart formation, by a break below $1,812 support, multiple tops marked during late April and early May will precede 200-SMA, respectively around $1,798 and $1,782, to lure the bears.

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