With commodities sharply down across the board yesterday, gold was under pressure all morning, with the 20 DMA providing resistance and nervousness in advance of the FOMC announcement adding to the downward bias.
As gold dropped through support at 1460, the decline escalated, falling through the next level of support at 1448 and dropping as far as 1440 before finding some buying interest.
The FOMC statement confirmed that the level of future Quantitative Easing will depend on economic data and could increase as well as taper off. This rather ambiguous statement gave gold a slight boost, as the Fed had not signalled an imminent tightening of the bond buying programme as some had feared.
Following the statement, gold bounced back to the exact 61.8% retracement of the afternoon's decline before falling back to close around 1458. This morning the downward bias has reasserted itself and gold has drifted lower, currently trading around 1455.
Oil and the industrial metals fell sharply yesterday, though have stabilised a little this morning, whilst the dollar has found support at 81 and has started moving higher again. The ECB are expected to cut interest rates today, which should give the dollar a boost and could pressure gold further, however the usual inverse relationship between gold and the dollar has not been evident for some months now.
Also on the economic data slate today from the US is the weekly jobless claims and productivity data.
Today's video for subscribers looks at yesterday's trading in more detail and our strategy for our current trade.
As gold dropped through support at 1460, the decline escalated, falling through the next level of support at 1448 and dropping as far as 1440 before finding some buying interest.
The FOMC statement confirmed that the level of future Quantitative Easing will depend on economic data and could increase as well as taper off. This rather ambiguous statement gave gold a slight boost, as the Fed had not signalled an imminent tightening of the bond buying programme as some had feared.
Following the statement, gold bounced back to the exact 61.8% retracement of the afternoon's decline before falling back to close around 1458. This morning the downward bias has reasserted itself and gold has drifted lower, currently trading around 1455.
Oil and the industrial metals fell sharply yesterday, though have stabilised a little this morning, whilst the dollar has found support at 81 and has started moving higher again. The ECB are expected to cut interest rates today, which should give the dollar a boost and could pressure gold further, however the usual inverse relationship between gold and the dollar has not been evident for some months now.
Also on the economic data slate today from the US is the weekly jobless claims and productivity data.
Today's video for subscribers looks at yesterday's trading in more detail and our strategy for our current trade.