Gold price has turned ugly recently as traders pay close attention to US stimulus talks, vaccine roll-out, and the upcoming interest rate decision by the Federal Reserve. The metal is trading at $1,843, which is slightly below the upper line of the descending channel.
Gold and Federal Reserve: Gold traders will today focus on the final meeting of the year. In this meeting, the bank will highlight the major priorities of the bank for the coming year. Economists believe that the bank will leave interest rates unchanged and commit to do more quantitative easing. Still, the language used by the bank will have implications for gold price.
What about stimulus? Investors are also focusing on US stimulus talks. Most of them believe that congress will pass the stimulus package in its proposed form. A team of bipartisan members of congress have created a two-part deal that could receive enough support.
The bigger deal will see funds allocated towards vaccine distribution and businesses while the smaller one will go to states and local governments.
XAU/USD technical outlook
What next for gold price? On the daily chart, we see that gold price has been in a strong downward trend since peaking at $2,076 in September. And in the past few weeks, the XAUUSD has formed a descending channel that is shown in black.
Most importantly, the 100-day and 50-day exponential moving averages are starting to have a bearish crossover. Therefore, the likely scenario is where the price falls back to the lower side of the descending channel at $1,765.
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Gold price technical chart
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