Bearish megaphone keeps gold sellers hopeful on Fed day
Gold holds lower ground near the yearly bottom as the market braces for the Fed’s rate hike. In doing so, the yellow metal remains inside a six-week-old trend-widening pattern. That said, the quote is likely to stay bearish unless crossing the $1,715 hurdle. Ahead of that, the two-month-long horizontal resistance area surrounding $1,696 and the $1,700 threshold could test the recovery moves. In a case where the metal prices rally beyond the $1,715 mark, the monthly high surrounding $1,735 could act as the last defense for the sellers.
On the contrary, the lower line of the stated trend-widening formation called megaphone, around $1,642 by the press time, restricts the short-term downside of gold prices. Also acting as immediate support is the 78.6% Fibonacci Expansion (FE) of April-August moves, near $1,619. It’s worth noting, however, that the metal’s weakness past $1,619 will make it vulnerable to testing April 2020 low near $1,572.
Overall, gold is likely to remain bearish even if the Fed’s disappointment may trigger intermediate bounce.
