Period of range tightening at an end
Gold has been in consolidation for days but it may be breaking out of this at the end of the week.
The range has been consolidating in recent days, even at a time when other markets were seeing plenty of volatility on the back of another hawkish move by the Federal Reserve.
That at one time would have been a negative for gold as higher rates are typically associated with lower gold prices. But these aren’t ordinary times. The economic outlook is highly uncertain, risks are severely heightened and inflation is soaring. So even though rates are rising and are expected to continue at a rapid pace, there remains plenty of appetite for gold.
The move today has ended a period of the range tightening but does it constitute a breakout? I’m a little sceptical. Especially as there hasn’t been much of a catalyst for the move. The failure to drop amid a more hawkish Fed is arguably bullish for the price but I’m not sure that’s enough to see it break much higher.
The key level could be $1,760 which is the range high in recent weeks. A break of this could be a strong signal of a broader rally in the yellow metal while a failure may signal that the primary trading band remains in place.
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at email@example.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.