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Gold prices are back under pressure after falling nearly 1% on Wednesday in response to the FOMC decision. The US central bank hiked rates by 75 basis points as widely expected.
Fed Chair Jerome Powell pushed back on the narrative that the Fed would pause rate hikes, stating: “It’s very premature, in my view, to think about or to be talking about pausing our rate hikes.” Mr. Powell went on to say that rates will most likely have to go higher than previously forecasted.
Gold prices fell on those comments and the US Dollar DXY Index increased as the Fed rate hike bets ramped up. Gold is likely to remain under pressure as long as traders continue to think more 75 basis point hikes are coming.
Technically, a breakout could be on the cards this week. A break of $1,610 may signal a move to $1,500. Gold has remained under heavy pressure since moving below $1,680 in September.
US mid-term election results, gold could start a new short-term move. A widely priced in Republican win could shake up markets, however, directionally, it is unclear what a Republican win would mean.
Current sentiment metric towards gold shows that sentiment still remains bullish, which could hint at a gradual move higher in the price of gold.
The ActivTrader market sentiment tool shows that 56 percent of traders are bullish towards gold. Going forward, we really need to see a negative bias by retail to help the chances of a sustained recovery.
Current sentiment metrics may make do not make it difficult for gold price to rally, especially with this key tech levels now broken.
Gold short-term Technical Analysis
According to technical analysis gold the price of gold has moved back under its trend defining 200-period moving average on the four-hour time frame.
According to technical analysis gold could receive more technical seller signs if the price starts to get comfortable under the $1,610 support level.
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Gold Medium-term Technical Analysis
The daily chart shows that the yellow metal has been rejected from a falling trendline last week. The price of gold has also moved below a major range that stood firm from 2022 until this Autumn.
Looking at the size of the range break we could see the price of gold starting to fall towards the $1,500 or even the $1,400 levels.
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