Gold trend sideways momentum & fed interest rate decision today
Gold prices dropped below the psychologically significant $1,300 level as the Federal Reserve's two-day meeting was on track in the course of investor expectations the U.S. central bank will hike rates on Wednesday.
The limitation in gold prices comes a day ahead of the Federal Reserve's decision on interest rates. As most market participants expect the Fed to raise rates Wednesday, the Fedupdate date on monetary policy will possibly permit additional notice.
Wells Fargo said it expects core PCE - the Fed's preferred measure of inflation – to reach the Fed's 2% target in the third quarter of the year, making way for the U.S. central bank to hike rates on Wednesday and twice more in 2018.
Gold prices trade on sideways momentum for the past one month as traders wait for the economic event - “FOMC statements as fed plans to raise FED interest rate” by 1.75% to 2% level on Wednesday night 11.30 pm, which was revealed by a financial news company.
As per the technical outlook, Gold short term 4H chart formed “Ascending triangle pattern”. In this pattern, prices are currently holding on support line at $1297 which is a slope support line. Once it breaks below, then the selling pressure will be enabled towards $1290-1275 level. At the same time prices are struggling to travel above the $1305 level as the previous support became resistance trend line at $1305 which is considered as a significant barrier of the market. Once a break above occurs, then the prices will turn bullish extending towards $1315-1325.