Gold ticks higher in Asia, awaits Fed verdict

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 16, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - Gold prices witnessed minor pullback in Asia, extending recovery from below 1060 levels as markets now await the outcome from the Fed’s 2-day policy meeting concluding later today.

    Gold: upside capped near hourly 50-SMA (1065.50)

    Currently, gold trades 0.24% higher at 1064.20, pausing its recovery near 1065.50 levels. Gold remains lifted, although trims gains, as the rally in the Asian equities dulls gold’s appeal as an alternative investment asset. The Nikkei rockets 2.25% while the Australian benchmark, the S&P/ASX rallies nearly 2%.

    Moreover, the recovery in the yellow metal can be seen on a short-covering rally as markets resort to profit-taking ahead of the key risk event for gold due later today – the FOMC decision. The US central bank, the Fed, is expected to raise the federal funds rate today by 25 bps, ending an era of low-interest rates since almost a decade. Such a move is likely to negatively impact the non-interest bearing gold.

    Gold Technical Levels

    The metal has an immediate resistance at 1069.11 (20-DMA) and 1072.42 (10-DMA). Meanwhile, the support stands at 1058.20 (Dec 15 Low), below which doors could open for 1056.33 (Daily S2).

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