Gold price is up sharply today as traders react to the Fed interest rate decision and the overall shift to alternative assets. XAU/USD is trading at $1,875, which is the highest it has been since November 20 this year.
What happened: Gold is usually traded in dollars. It is also often viewed as the anti-dollar currency because of its track record. Therefore, traders usually follow closely the action by the Federal Reserve when investing in the metal.
And yesterday, the bank decided to leave interest rates unchanged as most analysts were expecting. It also decided to continue its asset purchases in a bid to support the economy. As a result, traders viewed this is being a dovish sentiment, which pushed the dollar price lower.
Gold price is also rising due to the overall shift of capital to alternative assets like Bitcoin and Ethereum. Indeed, BTC rose to an all-time high while ETH is sitting pretty at its highest level since 2017.
Gold price technical outlook
What next for gold price: On the four-hour chart, we see that gold price has made a lot of progress in the past few days. It has risen from a low of $1,763 on November 30 to the current $1,875. That is a 6.5% increase. At the same time, the price is above the important 15-day and 25-day exponential moving averages.
Therefore, we believe that gold’s path of least resistance is still higher, with the next major hurdle being $1,900. On the flip side, a move below the double bottom low of $1,823 will invalidate this trend.
XAU/USD technical chart