Markets halt movement as traders and investors await clarity on the prospects of the Fed easing interest rates. Any vague statements from Fed Chairman Jerome Powell could negatively impact it, supporting dollar's exchange rate, which could also be the basis for continued correction in gold prices.
Earlier, geopolitical tension in the world and the expectation of lower rates drove prices to new highs. However, the postponement of the latter will provoke a continuation of correction in gold, playing out the technical overbought scenario. The other situation can occur only if Powell finally gives in to the markets and announces a plan for interest rate cuts this year.
Technical picture and trading idea:
The price currently lies in the middle line of the Bollinger Bands, above the SMA 5 and SMA 14. The RSI fell below the 50% level, while the Stochastic indicator turned down again.
Breaking through the support level of 2146.00 will strengthen the downward trend, leading to a fall to 2117.15, which corresponds to a 38% Fibonacci correction.