Gold breaks above resistance
TV – 300124
Gold was firmer first thing on Tuesday, but had given up most of its early gains by midday. It was a similar story for silver which hit its highest level in two weeks this morning, but then proceeded to weaken steadily. Gold has been rangebound for the best part of a fortnight now, having spent yesterday’s session once again stuck between $2,010 and $2,040. However, soon after the open of the US futures market, gold shot higher, breaking above the top end of the range. This was despite the lack of an obvious catalyst. The US dollar remains effectively unchanged as it continues to move sideways and consolidate in a pattern that has also been building over the last two weeks. Today’s move in gold is somewhat leftfield given that the Federal Reserve will announce its rate decision tomorrow evening and most traders are content to sit on their hands for now. While no one expects any change in the Fed Funds rate, there are hopes that the accompanying FOMC statement, or the subsequent press conference from Fed Chair Jerome Powell, may offer clues as to the timing of the first Fed rate cut in nearly four years.
Looking at the 4-hour chart above, it’s clear that upside momentum has been building in gold. We can see that in the price bars, and also from the MACD which has turned positive. The question now is if gold can build on these gains, with any declines managing to hold $2,040 as support.
Gold was firmer first thing on Tuesday, but had given up most of its early gains by midday. It was a similar story for silver which hit its highest level in two weeks this morning, but then proceeded to weaken steadily. Gold has been rangebound for the best part of a fortnight now, having spent yesterday’s session once again stuck between $2,010 and $2,040. However, soon after the open of the US futures market, gold shot higher, breaking above the top end of the range. This was despite the lack of an obvious catalyst. The US dollar remains effectively unchanged as it continues to move sideways and consolidate in a pattern that has also been building over the last two weeks. Today’s move in gold is somewhat leftfield given that the Federal Reserve will announce its rate decision tomorrow evening and most traders are content to sit on their hands for now. While no one expects any change in the Fed Funds rate, there are hopes that the accompanying FOMC statement, or the subsequent press conference from Fed Chair Jerome Powell, may offer clues as to the timing of the first Fed rate cut in nearly four years.
Looking at the 4-hour chart above, it’s clear that upside momentum has been building in gold. We can see that in the price bars, and also from the MACD which has turned positive. The question now is if gold can build on these gains, with any declines managing to hold $2,040 as support.
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