Gold Price Prediction – Prices Consolidate Following Fed Meeting Minutes

The dollar moved higher, generating some minor headwinds for the yellow metal Additionally, riskier assets rebounded after whipsawing on Tuesday and US yields moved higher which was also a minor negative for gold prices. Gold volatility remains elevated which is likely to continue to generate whipsaw price action.

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Technical Analysis

Gold prices consolidated on Wednesday. Prices are still poised to test target resistance near the March highs at 1,703. A break of this level would lead to a test of 2012 highs at 1,795. Support is seen near the 10-day moving average at 1,624. Additional support is seen near the 50-day moving average at 1,598. The Fed minutes to the meeting where the Fed cut to zero showed the Fed plans to use all of the tools in its arsenal to buoy the US economy.

A short-term trend is upward sloping as the 10-day moving average has crossed above the 50-day moving average. Short term momentum is positive to neutral. The fast stochastic trajectory is sliding which reflects consolidation. The current reading of the fast stochastic is 91, above the overbought trigger level of 80 which could foreshadow a correction. Medium-term momentum has also turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. The MACD histogram also generated a crossover buy signal, and now the trajectory is moving higher which reflects accelerating positive momentum.

Fed Meeting Minutes

Federal Reserve officials reacted to spreading coronavirus pandemic in March, prompting them to cut interest rates at two emergency meetings and signal plans to leave them unchanged until the economy recovered from its sudden stop.