Gold price stabilized near a historic peak ahead of Federal Reserve decisions

Mohammed Abdelkhalik
July 29, 2020

Ad Disclosure

Gold Price Forecast & Technical Analysis: 29th July 2020

The gold price stabilized on the European market on Wednesday within a limited range of transactions, near the highest levels ever recorded earlier in yesterday’s trading, in light of the reluctance of investors to build new centres, in anticipation of the issuance of the Federal Reserve decisions at the conclusion of its periodic meeting of monetary policy.

Gold achieved yesterday by 0.9%, in the eighth daily gain in a row, among the longest series of gains on daily basis since late December 2019, and recorded a new record level at $ 1,981.20 an ounce.

Gold price gained 11% this month

In terms of transactions for the month of July this year, gold prices are more than 11% high, on the verge of achieving the fourth monthly gain in a row, and highest monthly gain since August 2011.

The biggest monthly gain in nine years is attributed to acceleration of purchases of metal as a safe haven, in light of the high risk in global markets, especially the escalation of tensions between the United States and China, the failure of US government to date to control an outbreak of the Coronavirus, and the emergence of new high cases in some countries European, especially Spain.

These gains were also supported by the widespread decline of USD against a basket of global currencies, due to decline in the yield on US Treasury bonds for ten years, in light of the possibility of FED to strengthen stimulus policies to meet the grim expectations of inflation in the United States.

Gold technical analysis 29 July 2020

gold price -29th july 2020

Gold prices based on the level of 1910.10 and bounced up from there, to resume main bullish path within the upward channel that appears in the picture, waiting for more rise during the upcoming sessions, noting that our awaited targets start at 2000.00 and extend to 2068.00.

The expectation of price range is between 1910.00 as support and 2000.00 as resistance

Expected trend for today: bullish

Investors waiting for FED decision

Federal Reserve Board will conclude later in the day its periodic meeting to discuss appropriate monetary policy for economic developments, amid full possibilities of interest rates remaining at 0.25%.

US interest rate decision will be issued by 18,00, and Jerome Powell, Chairman of the Federal Reserve, will speak by 18,30.

Traders are waiting for any new indications that US central bank will increase its purchases of long term debt, or aim a high inflation level in coming years, the expectation to pour in the direction of continuing gold purchases as a safe haven, and enhance the prospects for trading prices of the precious metal above $2,000 barrier per ounce.

Author Mohammed Abdelkhalik

Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.