- Gold has launched higher during the trading session on Wednesday, and CPI numbers in the United States came out a little bit lower than anticipated.
- Therefore it makes sense that the U S dollar has taken a little bit of a hit.
- This obviously helps gold, and it suggests that perhaps the federal reserve may have the excuse it needs to start showing signs of loosening monetary policy.
- The monetary policy will get some answers later in the day, as the FOMC meeting is concluding, and the press conference will certainly be watched very closely by market participants.
Either way, we had a technical setup that suggested we could get a bit of a bounce, as the $2,300 level underneath is a significant amount of support, as it is a large, round psychologically significant figure and an area where we had seen a lot of buying previously. The size of the candlestick is rather impressive, but we also have to worry about the FOMC media later in the day and the press conference so that could cause some issues.
Top Forex Brokers
Ready to Continue Consolidation from Before
But ultimately, this is a market that looks like it's ready to continue consolidating between $2,300 on the bottom and $2,400 on the top. In general, gold has a lot of reasons to go higher, not the least of which would be the fact that the central banks out there are buying it, but we also have geopolitical concerns and profligate borrowing by countries like the USA, that is now borrowing at a clip of $1 trillion every 90 days.
Sooner or later, that adds up to real money and people start buying gold because they don't necessarily trust the currency. While I don't necessarily think that a US dollar meltdown is coming it certainly isn't helping itself as far as central bank actions and more specifically US treasury actions are concerned. Because of this I do think that this is a market where we buy on dips, and we are starting to see that play out in real time yet again.
Ready to trade today’s Gold prediction? Here’s a list of some of the best XAU/USD brokers to check out.