XAU / USD: where to direct the price of Gold before the Fed meeting on October 28? Trading REcommendations

Trading recommendations – Here!

 Current dynamics

Although the pair XAU / USD and is growing, it's not that simple. The current strengthening of the gold is mainly based on lower expectations of market participants regarding the interest rate increase in the US before the end of the year.

Since early May, gold fell from the level of $ 1225.00 to the lows of the year 1085.00 dollars an ounce in July, and could regain the present moment more than half of the losses in value.

On at least one year, a pair XAU / USD was able to find support in physical gold purchases from major retail and wholesale buyers in China and India.

Also, gold started to rise in price in August against the backdrop of the fall of the Chinese stock market. As a result, lower expectations of market participants regarding the Fed to raise interest rates in the US have added a picture of growth in the value of gold.

Earlier on Thursday, gold prices rose to their highest closing level since mid-June at the level of 1187.50 on speculation that the Federal Reserve may delay raising interest rates until 2016.

Recent disappointing data from the US labor market, consumer spending and inflation remaining below the target level of 2.0%, had a negative impact on the prospects of tighter monetary policy, contributing to an increase in gold prices.

Another strong deterrent for the Fed to raise rates in the United States is a clear slowdown in China's economy, the second largest after the United States. So, on Monday, China reported the slowest pace of growth in the 3rd quarter since the financial crisis. GDP for the first time since 2009 rose less than 7.0%.

However, active verbal intervention by the Fed over the possibility of a rate hike in the US before the end of the year held back the growth of this precious metal.

And some investors took profits on peak against the backdrop of comments by the Fed.

Technical Analysis

The pair XAU / USD rising and recent resistance levels 1168.00 (EMA200 on the daily chart) and 1172.00 (61.8% Fibonacci level) are now the support levels.

Although the pair XAU / USD is in an upward channel on the daily chart, the level of 1180.00 (EMA50 Weekly chart) remains a strong resistance level.

OsMA and Stochastic indicators on the daily chart are switching to short positions.

1172.00 level probe sequence (Fibonacci level of 61.8%), 1168.00 (EMA200 on the daily chart), 1155.00 (50% Fibonacci level and EMA144) and 1138.00 (38.2% Fibonacci level) will return the gold in a downtrend.

Growth of gold - questionable.

Now, in anticipation of the Fed meeting on 27-28 October and a decision on US interest rates, gold is likely to be within current levels between the minimum and maximum 1190.00 1155.00 1170.00 closer to the mark.

Nevertheless, consolidation above 1180.00 (EMA50 Weekly chart) can create a pair of upside risks in the medium term.