The price of Gold extended a downside movement on Friday, dragging the yellow metal to less than $1340 an ounce as bears go for a short-term correction. The technical bias remains bullish because of a Higher Low in the recent downside move.
As of this writing, the precious metal is being traded near $1335 an ounce. A hurdle may be noted around $1342, the horizontal resistance area ahead of $1352, the swing high of the latest major upside rally, and then $1400 for a long-run.
On the downside, the yellow metal is likely to find a support around $1329 an ounce, a major horizontal support area ahead of $1306, the swing low of the latest major downside move, and then $1300, the psychological number. The technical bias will remain bullish as long as the $1329 support area is intact.
Fed Monetary Policy
A heavily divided Federal Reserve left short-term interest rates unchanged but said the case for a rate increase “has strengthened”, in a strong signal that a move is likely before the end of the year. 3 out of 10 of the US Central Bank’s rate-setters voted against the decision and called for an immediate increase. But the Fed said that for the time being it wanted to keep the policy on hold as it waits for further evidence of the progress towards its objectives, leaving the target range for the federal funds rate at 0.25 per cent to 0.5 per cent.
Considering the overall technical and fundamental outlook, buying the precious metal on dips still appears to be a good strategy in short to medium term.