Gold prices ended Wednesday’s session down $0.61 an ounce as rising stock markets dented the appeal of the safe-haven metal. XAU/USD initially edged higher after the U.S. midterm elections resulted in a split Congress, but it came under pressure as focus shifted away from politics to the Federal Reserve’s monetary policy meeting. No rate hike is expected, however, markets will be focusing on the central bank’s assessment of the economy and inflation for hints on the timing of future rate hikes and policy adjustments.
The short-term charts are bearish, with the market trading below the Ichimoku clouds on the H1 and the M30 charts. The Tenkan-Sen (nine-period moving average, red line) and the Kijun-Sen (twenty six-period moving average, green line) are negatively aligned. The market is hovering just above the 1224-1222.80 area which is likely to act as effective support, at least before the Fed’s announcement. The bears have to push prices below there to challenge 1220.50-1219.50. If the market dives below 1219.50, then look for further downside with 1216.50-1215 and 1213/1 as targets.
To the upside, the initial resistance sits at 1227, followed by 1230-1229.50, the confluence of the Tenkan-Sen and the Kijun-Sen on the H4 chart. If this resistance is broken, the market will revisit 1232.50-1232. Beyond there, the 1237/5 area stands out as a strategic resistance. A break through there brings in 1240.
This article provided by NewsEdge.