Gold’s volatility was around the average for a meeting of the Fed because the result was more-or-less a foregone conclusion, although traders do seem to be taking more seriously the chances of a hike in the fourth quarter. The yellow metal has generally faced headwinds this quarter as economic projections became less gloomy. Even though the tightening cycle elsewhere also seems to be nearing its end, ‘high for longer’ is likely.
The current sideways trend between the 23.6% and 38.2% weekly Fibonacci retracements seems likely to hold in the runup to GDP data. Volume hasn’t strongly returned from summer’s lull and the moving averages are bunched closely together. The clear rejection of $1,940 after the Fed’s statement with a very large wick might suggest further losses in the medium term. However, traders looking to sell need to be aware of the potential for a false breakout around $1,900, a key psychological support and the area of the 38.2% Fibo.
The current sideways trend between the 23.6% and 38.2% weekly Fibonacci retracements seems likely to hold in the runup to GDP data. Volume hasn’t strongly returned from summer’s lull and the moving averages are bunched closely together. The clear rejection of $1,940 after the Fed’s statement with a very large wick might suggest further losses in the medium term. However, traders looking to sell need to be aware of the potential for a false breakout around $1,900, a key psychological support and the area of the 38.2% Fibo.