Gold Market Outlook
At its September meeting, the Federal Reserve kept interest rates unchanged in the range of 5.25-5.50%, as was largely expected in the market. Officials are increasingly confident that they can reduce inflation without seriously harming the economy or eliminating many jobs. Fed Chairman Jerome Powell reiterated the Fed's commitment to reaching 2% inflation. The Fed is prepared to hike rates.?
The XAU/USD pair's daily chart reveals that it is currently trading near the $… level, which is the 61.8% Fibonacci retracement of the most recent daily decline. As gold moves over the convergent 20- and 200-SMAs which are both around $…, the risk is tilted to the upside. On the other side, the intraday high and the Fibonacci level are converging with the 100-SMA, suggesting that substantial stops are likely to be forming above the area. The technical indicators are weak in terms of direction, although the Relative Strength Index consolidates at about 51. The 20-SMA, which crossed above the lengthier ones and is currently slightly below the $…, 38.2% retracement of the drop, is maintaining its bullish slope at the same time. However, the future course will depend on how the financial markets respond to the FOMC.
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