Gold price has done relatively well recently as the US dollar index has started retreating. The precious metal is trading at $1,862, which is 4.18% above the lowest level this month. It remains about 7% below its highest point in April. This performance is in sync with that of silver, which has risen by 7.7% from its lowest level this month.
FOMC minutes ahead
Gold has been in a recovery mode as investors price in more tightening by the Federal Reserve. In a statement last week, Jerome Powell insisted that the bank will continue hiking interest rates and start implementing a quantitative tightening policy. He also warned that there will be some pain in the market, signaling that the Fed will not save the market this time.
The next key catalyst for gold price will be the upcoming minutes by the bank that will come out during the American session. These minutes will provide more color about the FOMC’s thinking and deliberations in this month’s meeting. Judging by what the bank did and the previous statements by officials, analysts expect that the minutes will be extremely hawkish.
Gold price has also risen as investors seek for a place to hide as stocks continue falling. Stocks erased their Monday gains after the weak guidance by Snap. Just last week, stocks plummeted after the weak results by Walmart and Target. So, what next for gold prices?
Gold price prediction
Turning to the four-hour chart, we see that the gold price has been in a spectacular comeback in the past few days. As a result, the metal has managed to move to the 38.2% Fibonacci retracement level. The 25-day and 50-day moving averages have made a bullish crossover while the Relative Strength Index (RSI) has been in an upward trend.
Therefore, the outlook for gold is currently bullish, with the next key resistance level to watch being at $1,893. A move below the key support at $1,847 will invalidate the bullish outlook.