Gold (Yellow Metal) is consolidating on Wednesday after strong growth the day before, which led to a renewal of local highs from January 5.
The instrument has been developing a “bullish” trend since the end of last week, when quotes were at local lows from December 16. At the same time, gold remains under pressure from the upcoming hikes in interest rates by the world’s leading central banks, including the US Federal Reserve. Markets are almost sure that the American regulator will start raising rates already at its March meeting; however, they prefer to wait for today’s publication of December statistics on consumer inflation.
At the same time, investors are counting on a balanced and careful approach to tightening monetary policy, as Jerome Powell spoke about in his speech to Congress the day before. The Chair of the US Fed stressed that plans to raise the rate and the final completion of the quantitative easing (QE) program should not harm the economy and the labor market, which is still very tense.
Gold Support and resistance
Bollinger Bands in D1 chart show weak growth. The price range expands from above, freeing a path to new local highs for the “bulls”. MACD indicator reverses to growth while forming a new buy signal (the histogram is about to consolidate above the signal line). Stochastic is showing similar dynamics; however, the indicator line is already approaching its highs, indicating the risks of an overbought instrument in the ultra-short term.
Existing long positions should be kept until technical indicators are clarified.
Resistance levels: 1823.09, 1831.66, 1850.00, 1868.46.
Support levels: 1814.06, 1800.00, 1790.00, 1778.32.
Gold Trading Tips Today
| BUY | To open long positions, one can rely on the breakout of 1823.09 with the gold target at 1850.00. Stop-loss – 1810.00. Implementation time: 1-2 days. |
| SELL | A rebound from 1823.09 as from resistance, followed by a breakdown of 1814.06 may become a signal for new sales with the gold target at 1790.00. Stop-loss – 1830.00. |
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