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Gold is Rising Despite Inflation Returns

Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed’s interest rate guidance, fearing a hawkish stance that could trigger market risk aversion. The market anticipates the Fed will hold off on rate hikes until the end of the year, but concerns about rising energy prices may impact inflation. The Fed might keep interest rates high to bring inflation down to 2%, potentially affecting manufacturing and housing. Gold’s technical analysis suggests a short-term bullish trend, hovering around $1,935.

US Dollar – H4 Timeframe

The price action on the 4-hour chart of the US Dollar has been constrained within a rising channel for a while; the most recent move being a retest of the support trendline of the channel. This means we can expect to see a bounce back up from that trendline, in line with the bullish array of the moving averages and the support from the 50-period moving average.

Analyst’s Expectations:

  • Direction: Bullish
  • Target: 105.258
  • Invalidation: 104.450

XAUUSD – D1 Timeframe

The daily timeframe of XAUUSD has had two bouts of bullish impulse, both of which have failed to deliver higher highs. This is why price can now be seen trading within the wedge pattern, with a likelihood of a rejection from the resistance trendline. The rally-base-drop supply zone is expected to contribute to the bearish outcome from the price action.

Analyst’s Expectations:

  • Direction: Bearish
  • Target: 1912.20
  • Invalidation: 1952.00


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