Gold Rebounds After An Unsuccessful Attempt To Settle Below $1900

Key Insights

• Gold moves higher after the Fed Interest Rate Decision.
• Traders will stay focused on the dynamics of the U.S. dollar and U.S. Treasuries.
• A move above $1935 will push gold towards the resistance at $1950.

Gold Gains Ground As U.S. Dollar Declines

Gold is currently trying to settle above the 20 EMA at $1935 as the market rebounds after the recent strong pullback.

Yesterday, the Fed raised the interest rate from 0.25% to 0.5% and signaled that it was ready to start reducing the size of its balance sheet at the next meeting. Interestingly, the yield of 10-year Treasuries have pulled back from highs, and it looks that traders feared that the Fed would be more hawkish.

The recent increase in Treasury yields served as a significant bearish catalyst for the gold market, so traders should continue to monitor the developments in U.S. government bond markets.

It should be noted that the U.S. dollar has also pulled back from highs, which served as a positive catalyst for gold. At the same time, markets hope that the current Russia – Ukraine negotiations will end with a deal, which may be bearish for the safe-haven gold.

Technical Analysis

Gold is testing the resistance level at the 20 EMA at $1935. In case this test is successful, gold will move towards the next resistance level at $1950.

A move above the resistance at $1950 will open the way to the test of the resistance at $1975. If gold manages to settle above this level, it will head towards the next resistance at the $2000 level.

On the support side, the nearest support level for gold is located at $1915. In case gold declines below this level, it will move towards the support at $1900. A move below the support at $1900 will lead to the test of the next support level, which is located at $1890.

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