The gold price chart continues to fluctuate in a narrow range. This trend can be observed for about a month. In recent trading days, volatility increased on the background of the Fed meeting, but the drawdown was quickly bought back and quotes stayed in the trading range. Last Friday there was a contact with the upper boundary of the trend, and now the price of gold is turning downward again.
Analysts also point to this range and forecast an exit from it in the nearest future. Expectations have been revised to gold's decline.
According to the forecast of Gainesville Coins precious metals expert Everett Millman, a strong gold price movement could be registered in any trend. The metal has been trading in a flat range for quite a long time. According to Millman, there are two possible scenarios now: a retest of the 1880 dollar level or a rise to the round level of 2000 dollars.
The pause in the Fed's policy tightening was a positive driver for gold. However, hawkish comments from regulators prevented the upward impulse of the metal. Millman noted, there is still a risk of a sell-off in the gold market.
Traders are predicting a tightening of the Fed's policy at the next meeting. This is also a negative factor for gold prices. The future prospects for monetary policy remain negative after the hawkish statements by Fed representatives.
Investors are waiting for a speech by Fed Chairman Jerome Powell in Congress on Wednesday and Thursday to get more signals about the future direction of monetary policy.
According to the CME FedWatch tool, market participants estimate the chance of a Fed rate hike in July at about 72%.
According to the technical analysis, gold prices are in a narrowing range. A triangle pattern is forming with a false downward exit at the Fed meeting day. On Friday, the upper boundary of the pattern was tested. Now the price can drift towards the lower boundary one more time. There is a pessimistic sentiment in the market, so the probability of a new decline remains high.
The level of $1945 will be the downside target. Stop-loss can be set at a break up of $1965. In this case, there is a risk of an upward exit from the pattern, which will be followed by a strong dynamics of gold.
Decrease in the price of gold:
Take profit – 1945
Stop-loss – 1965
This content is for informational purposes only and is not intended to be investing advice.
