Gold Price Forecast: 200-Day EMA Holds Ahead of Fed Decision

Gold Technical Analysis

The gold market started the day on a positive note, bouncing from the crucial 200-day EMA as we wait for the Federal Reserve interest rate decision and, perhaps more importantly, the press conference and statement.

We are in an oversold condition as far as the stochastic oscillator is concerned, so a little bit of a bounce from this major moving average is not a huge surprise. Interest rates in America continue to be a major problem for gold markets, though, and technical analysts will look at this market and see a bit of a head and shoulders.

We’ll see if that kicks off because, if it does and the market starts to show signs of life again, the next major milestone in this market is the $4,500 level.

Long-Term Outlook and Key Fundamentals

The longer-term outlook for gold is probably bullish, with so much debt in the world and, of course, the fact that it is quite often used as a safe-haven asset. However, with higher interest rates due to energy inflation, that takes that safety bid out of it, as higher interest rates are really bad for gold historically speaking.

As long as there are energy inflation concerns out there, it makes a certain amount of sense that it causes negativity for gold. Expect choppiness. I think that’s pretty much a given on days where we have major interest rate announcements, especially when people are going to be looking at forward guidance.

I anticipate that this will be a very noisy day. Ultimately, at the end of the day, maybe once the dust settles, we might have a clearer picture of where the market wants to go.

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