- Gold stabilizes after pullback, eyeing Fed policy outlook
- Technical indicators show directionless picture
- It may ascend towards 5,100-5,150 if geopolitical tensions continue to bite
has been trading around 5,000 for a third straight day, having followed a three-day correction from the area of 5,200. Interestingly, the 50-day moving average (SMA) seems to represent key support line in the last three sessions. Today, investors will focus on Fed Chair Powell’s comments for cues about the outlook amidst growing anxiety of a war-driven spike in .
Technical indicators are showing a neutral picture, as the RSI is flatlining near the 50 neutral level. Additionally, the MACD indicator has declined near the zero line, remaining below its signal line.
If gold experiences a correction, it may immediately test the 4,950-4,970 area, which contains the 50-day SMA and the Bollinger band. Further down, it could find key support near 4,850, as also seen in mid-February. Even lower, the key ascending trendline drawn from November might potentially represent solid support at 4,700.
On the other hand, if heightened geopolitical tensions drive gold higher, it may test the 5.100-5,150 area, which houses the 20-day SMA and the 61.8% Fibonacci retracement of the January-February sharp decline. Further up, it might face strong resistance in the 5,300-5,350 area, which houses the upper Bollinger band and the 78.6% Fibonacci retracement.
To sum up, gold has been consolidating around 5,000 in a relatively tight range in the last three days, potentially awaiting today’s Fed policy meeting amidst ongoing tensions in the Middle East. If tensions do not ease, then gold may attempt to reclaim the 5,100-5,150 area.
