Gold Price Outlook – Gold Continues to Wait for Fed

Gold Technical Analysis

Gold markets have been somewhat quiet in early trading on Tuesday, which is probably not a huge surprise considering that we have an FOMC interest rate decision and a statement, as well as the press conference, on Wednesday. So, I wouldn’t expect a lot of gold for the Tuesday session. I think we’ll probably stay right around the 50 day EMA in what would more likely than not end up being choppy trading for the session.

This makes a lot of sense. A lot of traders are probably not exactly comfortable trying to guess what the Federal Reserve is going to do and therefore they will probably, for the most part, not change much in the way of positioning. Regardless, when you look at the longer term charts, it’s pretty obvious that this is a situation where the market is bullish from a longer term standpoint. We are consolidating. It’s the middle of summer.

It makes a lot of sense to just bounce around in a larger consolidation area, in this case, $300, trying to sort out what it is we are going to do next. I believe that the $3,200 level below is a major support level that traders will continue to pay close attention to. And if we were to break down below there, it could open up a move to the 200 day EMA, which is closer to the $3,000 level.

It’s not until we break down below there that I’d be willing to sell gold. However, what I am willing to do is buy dips that show signs of a bounce, especially if they’re close to that $3,200 level. On the upside, we have $3,500 offering a bit of a barrier. That barrier, if it were to get broken, could open up a much bigger move, perhaps to the $3,800 level based on the measured move of consolidation we have been in since the beginning of summer. Again though, I think the next 24 hours will be about waiting to see what happens with the Federal Reserve.

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