Gold price maintained the bullish momentum of the day and closed higher after the FOMC reiterated it was not in a hurry to taper the QE program. The US Dollar edged lower on the rate statement and subsequent speech by Jerome Powell, who heads the FOMC.
FOMC Chief Powell maintained the cautious stance about tapering as he has always done, pointing out that discussions were only in preliminary stages. Powell also noted that full discussions on tapering would only get going in subsequent meetings.
In analyzing the FOMC decision, analysts at Wells Fargo agreed with the general market sentiment that the progress made by the US economy had not yet reached a point as to warrant tapering. However, the bank notes that the FOMC may have acknowledged that “the time is drawing nearer”. This may explain the relatively muted response of gold prices to the upside on the XAU/USD chart.
Technical Outlook for XAU/USD
Gold price action on the XAU/USD daily chart closed 0.44% higher on Wednesday. The pathway towards 1815.20 remains clear, with a break of this area targeting the 1828/1840 resistance wall.
A lack of buying momentum may allow gold price to drop to the 1789.49 support, where a breakdown sends gold price towards the 1763.30 price mark.