The US Dollar is gaining broadly after the FOMC opted to leave rates unchanged at 0.25%. Additionally, the Fed is committing to use the “full range of its tools to support the economy”.
Purchases of $40 billion worth of agency-backed securities and $80 billion a month in US government bonds will continue until there is substantial progress in price stability and maximum employment has been reached.
The FOMC is also saying that the acccommodative policy that allows inflation to run slightly above 2% will be maintained, until long-term inflation expectations are well set above 2%.
Gold price on the XAUUSD chart is trading lower by 0.33%, losing all gains made on the day on the FOMC decision and statement. The Fed Chair Jerome Powell is expected to begin his press conference shortly.
Technical Levels to Watch
Gold price is now challenging yesterday’s resistance at 1850.78, which now acts as support. A breakdown of this price level returns price action to the previous range, which has 1821.55 as the floor. The floor then becomes the next target for sellers. Below this level, 1800.34 and 1788.90 remain near-term targets.
On the flip side, a bounce on 1850.78 on a shift in USD sentiment to a bearish one, sends gold price towards 1869.39, with 1881.99 and 1900.76 serving as near-term targets.
Gold Price Daily Chart