Gold has spiked 67$ or nearly 5.00% since the Federal Open Market Committee decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 percent. and indicate it would cut interest rates. As a result, the dollar shed 1.20% since the Fed meeting. Do you think the yellow metal has peaked out?
The yellow metal rose to its highest level in more than six years on Friday Asia session. Besides, the dollar index (KTM: USDX) lost 200MAs, now focus shifts to the 200MA on the weekly chart located around 95.80 below here 95.00, and 94.60 exists. The US dollar lost 1.30% against its G10 counterparts, led by dovish Fed.
Back to the subject of the Yellow metal, the price has been strengthened since Tuesday as protracted buying triggered a break of resistance at 1345$, 1348$ early June highs, confirming upside sentiment. From here on, we see the risk of a short-term retracement in price of Gold, given overbought RSI.
The US rates to stay lower for longer and weigh on the Gold price. We continue to forecast the price of Gold to head higher to 1450$ and 1503$ in the coming months on the back of Fed cuts and lower USDT yields. Therefore, we will look for another opportunity to enter a long Gold position when RSI does not look so overbought.
— KeytoMarkets (@KeytoMarkets) June 20, 2019
View: Gold price may rise towards 1450$ and 1503$, as suggested by an inverse H&S pattern on the weekly chart and A-B-C wave pattern.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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