Next Wednesday, the Federal Reserve’s decision on the interest rate will be published. Earlier reports from the Department of Labor and the U.S. Bureau of Labor Statistics confirmed the stability of the U.S. labor market and indicated ongoing inflation slowdown. However, market participants expect another interest rate hike by the Federal Reserve at this meeting. At the same time, expectations are growing for a pause in the tightening cycle of the Fed’s monetary policy. It is also possible that by the end of the year or at the beginning of the next, the Fed may switch to a policy easing.
In this situation, with the persisting high geopolitical uncertainty, still relatively high inflation, potential economic growth issues, and the expectation of an imminent change in the direction of the Fed’s monetary policy, demand for gold will remain high.
In this case, the XAU/USD pair may attempt to break through the psychological level of $2000 per ounce, which, in turn, could trigger another wave of frenzied demand for gold and push its quotes towards recent record highs near $2070 per ounce.
Breaking today’s local high at 1973.00 will be the first signal for the implementation of this scenario, with a breakout of the local resistance level 1987.00 confirming it.
In the alternative scenario, the price may break through key support levels at 1902.00 (200 EMA on the daily chart), 1896.00 (61.8% Fibonacci level of the downward correction from its peak at 2070.00 to its low at 1615.00 and 200 EMA on the daily chart), and move deeper into the downward channel on the daily chart towards its lower boundary and the 1843.00 mark (50.0% Fibonacci level).
Breaking this level will open the way for a deeper decline towards key long-term support levels at 1810.00 (144 EMA on the weekly chart), 1788.00 (38.2% Fibonacci level), and 1757.00 (200 EMA on the weekly chart), which separate the long-term bullish trend of gold from the bearish one.
The very first signal for the implementation of the alternative scenario could be a break of the support level at 1960.00 (200 EMA on the 1-hour chart).
However, it is not worth expecting declines below the support levels of 1902.00 and 1896.00. In this zone and near the support level of 1921.00 (144 EMA on the daily chart), a rebound and resumption of growth are expected.
Our main scenario is related to the rise in gold quotes and the XAU/USD pair.
Next Wednesday, the Federal Reserve’s decision on the interest rate will be published. Earlier reports from the Department of Labor and the U.S. Bureau of Labor Statistics confirmed the stability of the U.S. labor market and indicated ongoing inflation slowdown. However, market participants expect another interest rate hike by the Federal Reserve at this meeting. At the same time, expectations are growing for a pause in the tightening cycle of the Fed’s monetary policy. It is also possible that by the end of the year or at the beginning of the next, the Fed may switch to a policy easing.
In this situation, with the persisting high geopolitical uncertainty, still relatively high inflation, potential economic growth issues, and the expectation of an imminent change in the direction of the Fed’s monetary policy, demand for gold will remain high.
In this case, the XAU/USD pair may attempt to break through the psychological level of $2000 per ounce, which, in turn, could trigger another wave of frenzied demand for gold and push its quotes towards recent record highs near $2070 per ounce.
Breaking today’s local high at 1973.00 will be the first signal for the implementation of this scenario, with a breakout of the local resistance level 1987.00 confirming it.
In the alternative scenario, the price may break through key support levels at 1902.00 (200 EMA on the daily chart), 1896.00 (61.8% Fibonacci level of the downward correction from its peak at 2070.00 to its low at 1615.00 and 200 EMA on the daily chart), and move deeper into the downward channel on the daily chart towards its lower boundary and the 1843.00 mark (50.0% Fibonacci level).
Breaking this level will open the way for a deeper decline towards key long-term support levels at 1810.00 (144 EMA on the weekly chart), 1788.00 (38.2% Fibonacci level), and 1757.00 (200 EMA on the weekly chart), which separate the long-term bullish trend of gold from the bearish one.
The very first signal for the implementation of the alternative scenario could be a break of the support level at 1960.00 (200 EMA on the 1-hour chart).
However, it is not worth expecting declines below the support levels of 1902.00 and 1896.00. In this zone and near the support level of 1921.00 (144 EMA on the daily chart), a rebound and resumption of growth are expected.
Our main scenario is related to the rise in gold quotes and the XAU/USD pair.
Support levels: 1964.00, 1960.00, 1949.00, 1921.00, 1902.00, 1900.00, 1896.00, 1843.00, 1810.00, 1800.00, 1788.00, 1757.00
Resistance levels: 1973.00, 1980.00, 1987.00, 2000.00, 2010.00, 2048.00, 2070.00
The material has been provided by InstaForex Company – www.instaforex.com
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