Gold prices are moving up on Thursday supported by a weaker US dollar and decreasing equities market after the US Federal Reserve delivered a less-dovish outlook on monetary tightening than many analysts had expected.
The spot gold prices rose by 0.5% to 1,249.46 USD per ounce, after declining in the previous session. The prices crossed the 200-day moving average around 1,252 USD per ounce before the Fed’s statement on Wednesday.
The US gold futures declined by 0.3% to 1,252.80 USD per ounce on Thursday.
Silver rose by 0.3% to 14.64 USD per ounce, while platinum rose by 0.4% to 789.00 USD per ounce.
There is some safe-haven buying supporting gold prices today. Overall there is a risk-off sentiment in the market, which will move the gold prices during the day. The announcement of the benchmark interest rate hike has put pressure on gold, but the precious metal has some good support at 1,230-1,235 USD per ounce and in the near-term, the dollar index was going to be a good proxy for what gold is going to do.
Gold is sensitive to higher interest rates because they boost the dollar, making bullion more expensive for buyers using other currencies. The spot gold may retrace to 1,232 USD per ounce, following its failure to break resistance at 1,253 USD.
However, the gold price trend is still up and the RSI(9) is above 50, which is indicative of underlying bullish momentum. If the price drops below the support area this will end the series of higher troughs and the uptrend will be compromised. However, until that happens the trend is still regarded as up as per the precious metal’s peaks and troughs.
Gold price technical analysis
During trading yesterday, gold price dropped from 1,249.74 USD to 1,242.61 USD per ounce. This morning it traded at 1,245.40 USD.
There is a solid bullish channel in place since November and so despite the key-reversal showing force, there is still a positive tone in gold. A break below the lower parallel will quickly change that and have the trend-line from August. This would be a very important threshold to hold if the trend off the August low is to maintain, otherwise, another big leg lower could kick off. For now, caution is warranted given yesterday’s forceful turnabout, but so long as the Nov-current channel is maintained there isn’t reason yet to turn aggressively bearish.
If gold price trend overcomes the resistance range of 1,250.81-1,253.18 USD, the movement will target reaching and testing the zone 1,262.57-1,263.76 USD. Upon success, the upward trend will continue to 1,267.21-1,269.58 USD.
If gold price falls below the support zone 1,236.78-1,234.41 USD, then the next support will be the zone 1,230.96-1,229.77 USD. In case of a breakthrough, the downward trend may continue to 1,220.38-1,218.01 USD.
Silver price technical analysis
During trading yesterday, the silver price fell from 14.61 USD to 14.57 USD per ounce. This morning it is traded at 14.56 USD.
If silver price trend overcomes resistance zone 14.70-14.73 USD, the precious metal will target reaching and testing the zone 14.88-14.89 USD. Upon success, the upward movement will continue at 14.97-15.00 USD.
In case the silver falls below the support zone 14.47-14.44 USD, the next support will be the zone 14.37-14.35 USD. If the silver price breakthrough, the downward movement may continue to 14.21-14.18 USD.