Gold prices continued to stay sideways today. However, with increased snags in the economy, uncertainty might persist for long. In that case, investors might switch to gold, which acts as a safer asset class at times.
At around 09:17 GMT, the XAU/USD pair was trading near $1466.17 per ounce.
UK General Election
All world eyes stay glued towards Thursday’s UK Election outcome. Expectations of UK PM, Boris Johnson to grab majority appears to lower post-release of YouGov’s forecasts. This report suggested that Johnson’s chances to win a majority in the elections have lessened. Also, chances for a “Hung Parliament” are a bit higher.
The conclusions made by this market research Company are based on more than 100,000 interviews with voters over the last week. Soon, after the release of the YouGov’s forecast reports, the Sterling Pound fell drastically.
Despite being ahead in the polls, YouGov’s model had correctly predicted that Theresa May would lose her party’s majority. Anyhow, right now, uncertainty is in the air. Probabilities for further delay in the Brexit has gone higher.
With the fall in the developed economies, yellow metal would gather fresh bids, rising above $1500 per ounce in the coming sessions.
Fed Interest Rate Decision
policymakers announce the interest rate decision today at around 19:00 GMT. This time, the market expects the rate to remain unchanged at 1.75%. Notably, the 10-year Treasury bond yield appeared to grow ahead of the Fed rate decision.
Meanwhile, investors continue to keep an eye over the Fed’s 2% growth forecast for 2020.
The Weekly chart clearly portrays the bullish outlook for the XAU/USD pair. A breakout from an inverted head-and-shoulders pattern had already happened in mid-2019. Though the momentum has decreased since the last few sessions, the uptrend still remains intact.
Now, the bulls might be gathering some strength to revisit the upper territory. So, any movement above the centerline of the Bollinger bands would be highly critical.
On the daily chart, the near-term appears slightly bearish. The XAU/USD pair was trading below a thin layer of red Ichimoku Clouds. However, I’m pretty optimistic over the yellow metal price actions in the upcoming days. The pair might gear up its overall momentum and break above the resistance region formed by the Ichimoku Clouds.
Meanwhile, a strong support level stays just beneath the pair near $1450 level, which might prevent potential downfalls. On the upper side, other than the Ichimoku Clouds, significant resistances stand near $1520 and $1535 levels.