Fed has come to the rescue of gold ever since it last delivered its policy decisions on the intervening night of January 30 and 31, earlier this week. In the last one month, the yellow metal (Futures) tested a low of $1276 on January 21 and a high of $ 1331 seen yesterday.
Extremely dovish tone delivered by the Fed on its rate hike forward guidance weakened US dollar and boosted gold. It brought back the shine in gold and it saw aggressive upside immediately after the FOMC meet. Federal Reserve left its key U.S. interest rate at a range of 2.25% to 2.50% and Chairman Jerome Powell said the central bank would be “patient” about further interest-rate moves, adding that it was open to slowing the pace of the runoff of its $4 trillion balance sheet if needed.
Although gold price remains elevated it has lost some sheen now to trade at $ 1318. Market saw renewed risk-on trades as US-China trade optimism made some progress in trade talks between the US President Trump and Chinese Vice Premier Liu. Gold traded with a negative bias now as market awaits the US payrolls data later today, which will wrap up an eventful week.
Gold, after testing nine-month highs of $1330 has now entered a phase of consolidation around the $1323 levels. Any subsequent slide is likely to find support near the $1310 region, below which it is likely to accelerate the fall further towards the key $1300 psychological mark whereas any break of $1331 can take it to $1345- $1350 region.