Gold Price Forecast: XAU/USD Resistance Bound Ahead Of The Fed

This summer’s price action was emblematic of what can happen in a Central Bank-driven risk-on environment. With the prospect of continued fiat debasement, brought upon by an artillery of stimulus designed to offset the coronavirus pandemic, investors hurried into non-fiat assets like Gold and Silver at a record pace.

Overbought conditions populated Gold markets for a chunk of last summer, but that seemed to matter little in early-August as the yellow metal jumped up to a fresh all-time high at $2,075. But that same day Gold prices put in a bearish engulfing formation, and as warned in the technical forecast that week, that could open the door to a pullback scenario from those longer-term overbought conditions.

Now, here we are almost six months later, and buyers still haven’t been able to re-take control of Gold prices. Instead, we remain in a round of digestion that’s so far showing no signs of letting up. Meanwhile, similar themes of strength from what Gold showed last summer have popped up in Bitcoin and then Ethereum and, now, in the stock of Gamestop (GME). These bulls markets would all seem symptomatic of a very loose monetary environment, and this is something that we’ll hear the Fed speak on at their rate decision/press conference tomorrow.

At this point, Gold prices are still in digestion, holding within a longer-term symmetrical triangle pattern.


(Click on image to enlarge)

Gold Daily Price Chart

Chart prepared by James StanleyGold on Tradingview

Getting shorter-term on the matter and there’s perhaps even less clarity. There has been some adherence to the Fibonacci retracement levels set by the June-August major move. The 61.8% marker from that study at 1825.31 has now caught a couple of support inflections; while the 50% marker of that move is the topside of a resistance zone that’s currently helping to hold the highs (represented by a blue box on the below chart).

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Ross Tolstedt 1 month ago Member's comment

Thank you!