Gold Price Outlook – Gold Continues to See Sideways Action Ahead of Fed

Gold Technical Analysis

The gold market is very choppy at the moment, and Monday looks like it is going to be more of the same. We are essentially spinning our wheels just above the crucial $4,200 level, a large, round, psychologically significant figure that a lot of people will be watching closely. The $4,200 level is going to be a market memory type place, as we had seen both support and resistance there previously. So, it does make sense that we’re hanging out here. Furthermore, you have to keep in mind that the Federal Reserve has an interest rate decision on Wednesday, and a lot of traders, although they expect an interest rate cut, they’ll want to see what the tone of the cut is.

Federal Reserve Tone and Market Reaction

Will the Federal Reserve sound extremely dovish, or will they give what is known as a hawkish cut, meaning that they cut, but it doesn’t sound like they’re on autopilot to start cutting even further? I suspect that would be the case. However, market participants aren’t sure, I think, and they’re just killing time at the moment, waiting to see what the next central bank guidance will be.

I do think short-term pullbacks get bought into, and I really don’t have any interest in shorting gold until we break down below $3,950. Something that’s not likely to happen in the short term. To the upside, if we do start to rally for whatever reason, $4,400 is your target. That’s where we had seen a lot of selling previously.

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