Technical Analysis: Gold recovery remains elusive below $1,810, focus on Fed

Although US dollar weakness ahead of the Fed’s verdict put a bid under gold prices, a confluence of 100 and 50-SMA becomes a tough nut to crack for the bulls around $1,807-08. Even if the gold buyers manage to cross the $1,808, a two-week-old downward sloping trend line near $1,810 will be another hurdle before confirming an upside to the month’s top surrounding $1,835. It’s worth noting that the MACD and RSI do favor the upside momentum but after all, it depends upon the Fed Chairman Jerome Powell and his words.

On the contrary, 50% Fibonacci retracement of late June to mid-July upside near $1,792 could test the metal’s intraday selling in case bears retake the controls post FOMC. Following that, the June 29 swing high near $1,765 can offer an intermediate, a break of which will be a call to the last month’s low near $1,750 and mid-April low near $1,725 to the chart. However, any further weakness past $1,725 will be challenged by the $1,700 psychological magnet before directing the sellers to the yearly low near $1,677. Overall, Fed is likely to reiterate its cautious optimism while keeping the monetary policy unchanged. Though, mentioning tapering is the key for USD bulls, who are inversely correlated to gold.

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