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Gold price narrows the boundaries of volatility

13 June 2023 206
Gold price narrows the boundaries of volatility

Gold prices continue to fluctuate in a narrow range before the publication of the interest rate by the Fed. 


According to Michael Langford, executive director of the corporate advisory firm AirGuide, the market waits for the Federal Open Market Committee (FOMC) meeting to determine gold prices’ direction more precisely. Currently, there is no incentive for the yellow metal's price to grow compared to other assets, regardless of the Fed’s decisions.


Gold may continue to move in a sideways trend, with support at the level of $1941 per ounce. If that point is overcome, the price at $1,841 would be the next support level, Langford added.


The yellow metal is seen as a hedge against inflation. An increase in interest rates aimed to rein in rising prices tends to reduce the appeal of non-earning assets such as gold.


According to the CME FedWatch, there is an 80% chance that the regulator will leave rates unchanged. The Fed will raise them by 25 basis points with a 20% chance.


U.S. inflation data was released today at 12:30 p.m. GMT. The Consumer Price Index is expected to fall to 4.1% year-over-year from the previous indication of 4.9%. Confirmation of the data will increase the likelihood of the Fed's interest rates remaining unchanged and may strengthen the dollar in the short term.


Gold continues to correct in the range of 1935.00 – 1984.00. At the same time, the boundaries of volatility are narrowing. The upward support is obvious. The news background of today may reduce the gold price to the trend support near 1945.00.  


The curve of the Relative Strength Index (standard values) is between the overbought and oversold, which indicates the market’s uncertainty. In addition, the curve demonstrates the convergence from the support side. It shows a steady determination of market participants to buy the precious metal but at more favorable price positions.


Signal:

Short-term prospects for gold are purchasing near 1945.00.

Target is at the level of 1980.00.

Part of the profit should be fixed around the level of 1967.00.

Stop-loss is around the level of 1928.00.


The bullish trend is short-term, so choose a trading volume of no more than 2% of your balance.

This content is for informational purposes only and is not intended to be investing advice.

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