Gold Moves Above $1750 As Dollar Pulls Back
- Gold continues to rebound as the U.S. dollar remains under pressure against a broad basket of currencies.
- Yesterday’s FOMC Minutes signaled that the Fed would slow the pace of rate hikes, which was bullish for precious metals.
- A successful test of the resistance at $1750 will open the way to the test of the next resistance level at $1765.
Weaker Dollar Provides Support To Gold Markets
Gold is currently trying to settle above the resistance at $1750 as the U.S. dollar remains under pressure.
The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, settled below the 106 level and moved towards 105.70 as traders reacted to the dovish FOMC Minutes.
The FedWatch Tool indicates that there is a 75.8% probability of a 50 bps rate hike at the next meeting. The market prepares for a slowdown in the pace of rate hikes, which is bearish for dollar and bullish for precious metals.
In the near term, gold traders will stay focused on the dynamics of the American currency. The U.S. Dollar Index is currently moving towards multi-month lows at 105.35. In case the U.S. Dollar Index settles below this level, it will gain additional downside momentum, which will provide more support to gold prices.
Gold Tries To Settle Above The $1750 Level
Gold has recently managed to get above the resistance at $1750 and is trying to gain additional upside momentum. RSI is in the moderate territory, and there is plenty of room to gain momentum in case the right catalysts emerge.
The nearest resistance level for gold is located at $1765. If gold settles above this level, it will head towards the next resistance, which is located at $1775. A successful test of the resistance at $1775 will open the way to the test of the next resistance at $1785.
On the support side, the previous resistance at $1750 will likely serve as the first support level for gold. If gold declines below this level, it will move towards the next support near the 20 EMA at $1730. A move below $1730 will push gold towards the support level at $1715.
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