Gold price is treading water below $1,850 heading into the Fed showdown this Wednesday. As FXStreet’s Dhwani Mehta notes, death cross confirmation and potential Fed hawkishness keep doors open for a correction in the yellow metal.
“Gold’s upside remains capped by the upper boundary of a month-long rising wedge formation, now pegged at $1,853. Rejection at that level could prompt a corrective pullback in gold price towards Tuesday’s low of $1,835. Should the downside gather traction, then bears will target the recent range lows around $1,829.
“The 200-Daily Moving Average (DMA) crossed the 50-DMA for the upside on a daily closing basis, validating a death cross and adding credence to a potential leg down in gold price.”
“If the Fed fails to cheer the hawks, then gold bulls will gain a fresh life, triggering a fresh upswing for a retest of two-month highs of $1,854. This will confirm an upside breakout from a rising wedge formation, defying the bearish odds, with a rally towards $1,860 in the offing.”
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