Gold price continues higher for the third consecutive session as the recent rally in risky assets questions ahead of the Fed policy meeting and decision later today. The correction yesterday in equity markets supported the gold price, which posted the best day in a month.
Trades are cautious today ahead of the Fed monetary policy decision and the first economic projection since the coronavirus crisis hit the world. A negative outlook about the recovery from the Fed will be gold positive while the reiteration for keeping interest rates close to zero for a long time will also be supportive of the gold price.
Some analysts believe that the Fed will enact the Yield Curve Control, which will keep the yield at a pre-determined level. A decision like that will also be gold positive, and investors might shift their attention to gold and silver.
On the other hand, if Fed hinds that are confident for a fast recovery of the economy after the coronavirus crisis would put some pressure on safe-haven assets.
Gold price is 0.34% higher at 1,719 above the 100-day moving average. Gold managed to rebound above the 1,700 mark, spending only two days below the critical level. The break above the 50-day moving average gave the bulls again the upper hand.
On the upside, initial resistance stands at 1,720 the daily top. If the gold price breaks above 1,720 then the next hurdle would be met at 1,731 the high form June 3. Next supply zone would emerge at 1,745 the high from June 2.
On the other hand, the immediate support for gold price stands at 1,712 the daily low, while more buying interest might emerge at 1,704 the 50-day moving average. In case the bears continue the pressure, then the next support zone stands at 1,676 the low from June 8.