Gold Surges Amid Talks Of Tapering

Gold investors stayed on the sidelines ahead of the release of minutes from the Federal Reserve’s latest policy meeting, as gold prices held steady.

In addition, we see a strong resistance line at $1,795, which is the meeting of the essential Fibonacci 61.8% one month.

Next week’s Jackson Hole symposium could provide clues about when the Fed plans to taper. The Fed minutes are due Wednesday. The Fed chair, Jerome Powell, discussed the pandemic at a town hall meeting on Tuesday, but he did not discuss monetary policy or provide any specific comments related to growth or the COVID-19 delta variant.

The Federal Reserve is widely expected to begin scaling back its $120 billion per month quantitative easing program in the coming weeks.

A number of Fed officials are advocating that rates should be raised by the end of the year because inflation and the labor market have both improved.

As we look down at market indicators, $1,770 per ounce has been identified as a weakness support, which is the confluence of the 10-day SMA and Fibonacci 38.2% one-day.

Jerome Powell has however said there will be no change in policy, for now, saying he wants to see the health crisis behind us before making any changes.

It appears that the market has likely pre-empted coming reductions in asset purchases, which may be the biggest plus for gold. Even though this does not guarantee a gold price increase, it may indicate that gold cannot drop too much. Gold prices may be stuck around $1,800 an ounce.

Afghanistan is also a situation gold traders monitor closely. Global financial markets and gold prices may remain supported by deteriorating political conditions in the region due to the withdrawal of US forces. As a result, the precious metal is considered a safe haven during difficult financial and political times.