After rejecting the critical resistance at $1489.52, the gold price dropped towards the trend line support at $1466.92. The strong rejection of the support at $1466.92 and a dovish statement from the FED officials have fueled up the bulls. If the yellow metal bulls gain control from this level, we might see another test of the resistance at $1489.52. Gold price breaking above that level might push the gold price towards the next resistance level at $1517.23. This level might provide significant selling momentum and cap the bullish rally. However, the daily closing of the price above the $1517.23 might push the precious yellow metal towards the major resistance at $1565.38.
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On the downside, gold bears need to break below the support at $1466.92 to establish fresh selling pressure. A daily closing of the price below the trundling support at $1466.92 might push the price towards the next support at $1450.67.
The gold bulls might try to regain control of the market from that level and any bullish price action signal might provide an excellent buying opportunity. However, break below the support at $1450.67 might push the gold price towards the critical low at $1396.41. But such an extensive downfall requires strong gain in the U.S dollar index. The FOMC statement and economic projections indicate weakness in the U.S economy. So, the overall bias remains slightly bullish for the precious metal.Download our latest quarterly market outlook for our longer-term trade ideas.
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