- Gold rebounded after approaching $1,800 on Tuesday.
- Dollar weakness coupled with falling yields favor the metal.
- Market focus on the Federal Reserve decision.
Gold is rising on Wednesday, the day of the Federal Reserve decision and hit a two-day high above $1830. The yellow metal is recovering after bottoming out on Tuesday at $1804, the lowest level in four weeks.
The rebound of Prayed It occurs with the impulse of a general correction of the dollar in the market and before a slight drop in the yields of the Treasury bonds. The DXY falls from years high, making the first low in six days and trades below 104.80. The 10-year Treasury bond yields 3.37%, after reaching 3.49% on Tuesday.
In addition to the above, the fact that European bonds, mainly Italian ones, fell sharply, while an unforeseen meeting of the European Central Bankto deal with the decline in the price of non-core countries’ bonds.
The focus of the day is on the Fed. At 18:00 GMT the decision of the US central bank will be known. The market is pricing in a 75 basis point hike. A week ago this was ruled out. The decision and subsequent events are expected to generate a lot of volatility in the markets, including gold.
Before the Fed, in The US retail sales report will be published, the Empire manufacturing, wholesale inventories and the NAHB index of the real estate sector.
For now, just a correction
Gold’s rebound can be seen as a correction for now. The dominant bias remains bearish. To the upside, the key resistance is between $1,845 and $1,850, where horizontal levels and the 20- and 200-day moving averages converge. A comeback above would leave the yellow metal with some strength.
In the opposite direction, the $1818 area has now become relevant intraday support. Below will then follow the key $1805 area and below that the May low at $1785.
Technical levels
Source: Fx Street
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