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Traders eye the FOMC meeting, which is due today. The metal has been consolidating in a tight range between $1,085.00 and $1,110.00.
HSBC: Federal Reserve coming closer to the interest rate hike, a stronger dollar, low inflation, China's and India's weak demand for physical gold and other factors weigh on gold prices.
Technical view: The yellow metal was trading at $1,095.00 during today's Asian session compared to Tuesday's closing price of $1,094.80. A weekly trading pattern is framed between $1,085.00 and $1,119.00 on a closing basis. A close on either side will result in more room to trade. In the weekly chart, the metal managed to hold the channel support trendline at $1,085.00 on a closing basis. The metal has been reaching lower highs and lower lows breaking below the large bearish head & shoulder pattern.
The weekly support is found at $1,085.00, $1,077.00and $1,073.00. A weekly close below $1,085.00 opens gates to $1,068.00, $1,045.00, and $1,005.00. In the monthly chart, strong support zone is seen between $1,045.00 and $1,032.00. The metal fell below the 14-year ascending trendline in the monthly chart. It has been managed to close above $1,085.00 on a daily closing basis for six consecutive days.
Intraday: Intraday support is found at $1,093.00, $1091.00 and $1,087.00. Resistance is seen at $1,098.50, $1,105.00, and $1,107.00. Ahead of the FOMC meeting, we expect impulsive moves. A daily close below $1,085.00 opens gates to $1,077.00 initially, later it is likely to extend towards $1,055.00.
Earlier, in the H1 chart, the metal made a double top at $1,105.00 during yesterday's session another top at $1,098.60. The metal has been testing its fate at the level of $1,085.00.
Intraday selling is available below $1,091.00 with an initial target at $1,088.00. Selling will accelerate below $1,085.00 towards $1,082.00, $1,080.00, and $1,077.00. Panic is likely to be triggered below $1,077.00. Use a rise to sell during the week. Buying is available above $1,098.00 with target at $1,100.00, $1,102.00, and $1,104.00. A strong pullback is likely above $1,106.00 towards $1,109.00 during a day.
To contact the author of this analysis, please email- joseph.wind@analytics.instaforex.com
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