Gold Price Prediction – Prices Consolidate Following Fed DecisionThe dollar rallied weighing on gold prices
Gold prices moved lower but finished off session lows. The dollar moved higher on Wednesday, putting downward pressure on the yellow metal. US yields declined following the Fed monetary policy meeting. In the Fed’s statement, the central bank took out language from the December meeting that said that the economy continued to recover but remain below levels at the beginning of the year. Instead, they said that the economy had moderated in recent months, with weakness concentrated in the sectors most adversely affected by the pandemic.
Trade gold with FXTM
75% of retail CFD investors lose money
Gold prices edged lower but rebounded into the close nearly forming a doji day with a lower wick. Prices fell below support which is now resistance near the 10-day moving average at 1,850 Support is seen near the January lows at 1,802. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal, and is now poised to generate a crossover buy signal which is a sign of consolidation. Medium-term negative momentum has decelerated as the MACD (moving average convergence divergence) histogram is printing in the red with a rising trajectory, which points to consolidation.
The Fed Kept Rates Unchanged
The Federal Reserve said during its monetary policy meeting that the US economy has softened in recent weeks but kept policy on hold. At the same time, the central bank wants to monitor a Covid-19 vaccine rollout on business activity and hiring. The Fed has set short-term interest rates near zero, launched a bond-purchase program of $120 billion per month, and said it will keep stimulative measures in place until its lower unemployment and 2% inflation goals are achieved.