Gold price fell on Monday as the dollar firmed in the wake of indications from the U.S. Federal Reserve last week that it will pursue a tighter monetary policy. What next should traders expect?
1 October, GKFX – The Fed raised U.S. interest rates last week and said it planned four more increases by the end of 2019 and another in 2020, amid steady economic growth and a strong job market.
Higher U.S. interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.
Gold Price Falls Near Important Support
Friday’s goodish recovery move from 61.8% Fibonacci retracement level of the $1160-$1210 recent up-move stalled near an important confluence support break-point turned resistance.
The mentioned hurdle comprises of 38.2% Fibonacci retracement level and a short-term ascending trend-line, a part of a symmetrical triangular formation on short-term charts.
Given that it remains well below important intraday moving averages – 50, 100 & 200-period SMAs, a convincing break below Friday’s swing low will reinforce last week’s bearish breakdown.
Gold 4-hourly chart
Spot Rate: $1186.94
Daily High: $1192.41
R1: $1192.41 (current day swing high)
R2: $1198.30 (horizontal zone)
R3: $1201.00 (23.6% Fib. level)
S1: $1180.67 (Friday’s swing low)
S2: $1174.06 (recent daily closing low)
S3: $1160.19 (near 20-month low set on August 16)
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