Gold Price Prediction – Prices Rally as Fed Keeps Rates Unchanged
Gold prices moved higher on Wednesday as the dollar lost ground following the Fed’s decision to keep interest rates on hold. The upshot was that the Fed will remain neutral with rates at 1.5%-1.75% for the foreseeable future. Growth is expected to ease slightly according to the Fed in 2020, and ease further in 2021. Fed Chair Powell says he would want to see a persistent rise in inflation before hiking rates again.
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Technical Analysis
Gold prices moved higher pushing through short-term resistance which is now short term support seen near the 10-day moving average at 1,466. Resistance is seen near the 50-day moving average near 1,480. Prices remain in a downward sloping consolidation pattern, after running up to fresh multi-year highs in September. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is neutral as the MACD histogram prints in the black with a flat trajectory which points to consolidation.
The Fed Kept Rates Unchanged
The Federal Reserve announced on Wednesday after its two-day meeting that interest rates would remain unchanged. Fed Chair Powell says he would want to see a persistent rise in inflation before hiking rates again. The FOMC held rates unchanged as widely expected and kept the funds’ rate in a target range of 1.5%-1.75%. The committee indicated that monetary policy is likely to stay where it is for an unspecified time, though officials will continue to monitor conditions as they develop.The FOMC indicated little chance of a cut or increase in 2020.
This article was originally posted on FX Empire
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