Gold Price Analysis – Gold Continues to Jump Higher Ahead of Fed

Gold Technical Analysis

Gold continues to power higher during trading on Wednesday as we wait for the Federal Reserve. This is in anticipation of the Federal Reserve decision, but although the decision is already a known quantity—there shouldn’t be a change—the real question will be how does the statement move the U.S. dollar and of course how does the press conference. Both of those are the wild cards and at this point it looks like the market believes Jerome Powell will be extraordinarily dovish. I hope that consensus is correct, because this is setting up a nasty pullback if it comes.

I don’t think that the market is really going to get too far ahead of itself without perhaps putting traders in danger. So, with that being the case, I would be very cautious about chasing at this point, although I freely admit there’s only one direction you can trade this market.

Market Outlook

Short-term pullbacks should offer buying opportunities, and quite frankly, that’s what I’m hoping to see later in the day. The $5,000 level looks like a major floor in the market at the moment and I think short-term pullbacks towards that area will continue to attract a lot of interest. I have no interest in shorting this market, and at this point, we could be looking at $5,500 rather quickly. I believe that the $5,000 level will continue to be defended by the bullish, and have a floor of $4800 under there as well.

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