Gold prices trade sideways today after yesterday’s sharp fall to 1,490. Federal fund futures show that investors see a 94% chance for a 25 bps interest rate cut by the FOMC tomorrow. Declining U.S. interest rate will pressure USD and US bond yields and will help gold prices.
Gold helped last week by weaker US macro data which further increased the bets on an interest rate cut by Fed. The ECB kept interest rates unchanged and continued its bond repurchase program of €20billion per month.
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Gold Price Technical Levels
Gold trading 0.03% lower at $1,491.71 as the gold price momentum turns bearish after the price breached the $1,500 mark and the 20-day moving average at 1,494.
On the downside, first support for gold now stands at $1,490.06 daily low and then $1,487.1 the daily low from October 24th. Gold has established a strong support zone at $1,458 October low. Gold remains well supported by weak global economic data, and tensions in Syria. On the upside, the immediate resistance would be met at $1,494.69 today’s high while a move above will open the way for a move up to 1,504 where the 50-day moving average crosses before an attempt to $1,519 high from October 3rd.