Gold shot up from $1310 to a high of $1323.26 on the back of a widely expected dovish twist to the Fed statement that underlines the patience towards monetary policy and the vigilance towards domestic data and the world economy. The committee said it is prepared to slow down or even reverse the steady course of selling its portfolio of Treasuries and mortgage bonds purchased to help boost the economy. Fear over more complications in the trade war is also weighing on the Dollar and thus investors are shifting to Gold.
After retreating a bit from the previous highs, Gold prices surged again to print new highs at $1323.26. The price is currently holding above the $1320 level despite facing some selling pressure at the highs. However, our concern is based on the divergence between the price and the momentum pointing towards a correction that could delay the continuation of the rally. We will be focusing on the $1316.78 support level and wait for the extreme conditions to fade before we expect another upward move.
Support: 1316.78/ 1312.38
Resistance: 1326.29 / 1335