Gold Price Prediction – Prices Rebound Following Fed Decision

Gold prices moved higher on Wednesday rising following the Feds Monetary policy decision. The Fed kept interest rates unchanged as widely expected, but projected slow economic growth for several years. The dollar tumbled lower after the fed announcement continuing to trend downward. US yields also moved lower, with the 10-year moving back to 75-basis points.

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Technical analysis

Gold prices rebounded for the third consecutive trading session on Wednesday in the wake of the Fed decision and economic forecasts. Prices rebounded back to resistance near the 10-day moving average at 1,715. Target support is seen near the 50-day moving average at $1,703. Short term momentum has flipped flop and turned positive as the fast stochastic generated a crossover buy. The current reading on the fast stochastic is 35, just above the oversold trigger level of 20. Medium-term momentum remains negative as the MACD (moving average convergence divergence) histogram prints in the red with a rising trajectory which points to consolidation.

The Fed Kept Rates Unchanged

The Federal Reserve left interest rates unchanged and near zero on Wednesday as the central bank projected a slow economic recovery from the pandemic-induced recession. The Fed announced their first economic projections this year.  Fed officials forecast that they expect the unemployment rate to end 2020 at 9.3% and remain elevated for years, coming in at 5.5% in 2022. Chairman Powell in a press conference said that the Labor Department report likely understated the unemployment rate.