Gold price continued to trade above the crucial level of $1,950 on Thursday after trading below it in the past two sessions. The financial markets are digesting the Fed interest rate decision amid the banking crisis. As at the time of writing, gold price was up by 0.41% at 1,977.87 per ounce.
Gold price has continued to find support in the decline in the US dollar. Earlier on Thursday, the dollar index dropped to a level last recorded on 3rd February at $101.96. Granted, it has since erased some of those losses to trade at $102.41 as at the time of writing. As is the case with other dollar-priced assets, a decline in the US dollar makes gold less expensive for buyers using foreign currencies.
As the financial markets continue to digest the Fed’s dovish guidance, bulls in the gold market will be keen on retesting the psychologically crucial zone of $2,000 per ounce. However, there may be some level of volatility as the US dollar makes a corrective rebound.
Gold price outlook
XAU/USD extended its previous gains on Thursday as the financial markets digest the Fed’s interest rate decision released in the previous session. Over the past two weeks, the precious metal has rallied by about 10% based on its status as a safe haven.
As seen on its daily chart, it continues to trade above the 25 and 50-day exponential moving averages. For as long as it continues to trade above the psychological level of 1,900, which is along the 25-day EMA, the bulls will remain in control of the market.
In the short term, the range between the crucial support level of 1,950 and the resistance level of 1,990 will be worth watching. While investors have eased on their concerns regarding the banking crisis, heightened recession fears may push gold price to a fresh one-year high of 2,017.77. On the flip side, the rebounding of the US dollar may ease the rallying to 1,950 or lower to find support at 1,927.35.