Gold finish week strongly, traded up towards 1,190 as the Federal Reserve cautioned over its rate hike path and U.S. economic growth. The yellow metal rallying strongly within $45 range despite becoming oversold and seeing signs of capitulation selling early in the week. Prices immediately spiked at the FOMC statement release, rising nearly 2 percent, from 1,150 to 1,175. That’s the largest one-day move we’ve seen from the yellow metal.
Gold is getting traction from dovishly perceived FOMC statement as short-covering and fresh purchases sets gold to break above the 78.60% Fibonacci Retracement on the daily chart. For long the yellow metal was oversold and due for a bounce. The precious metal has now break above the down trend indicator and looks likely to hold recent gains, inching closer to 1,200.
The yellow metal traded quietly during early Friday session before finding interest in later session to close over 1.00% higher. Peaking at the 61.80% Fibonacci Extension level, the next upside target will be the important 1,200 resistance level. In the big picture, the declining USD given the precious metals a much needed boost and that being said the yellow metal could continue to spiked higher. Indication from Stoic. Oscillator is now in the overbought region and prices action could see the tempering of last week’s gains before re-establishing its stellar recovery.