Gold Price Slips Below $4,300 as Technical Picture Turns Ugly Ahead of Fed Decision
Gold prices are under pressure as the week begins, and technical analysis is painting a less-than-ideal picture. The precious metal has slipped below $4,300, and traders are positioning ahead of the Federal Reserve's decision. A stronger dollar and elevated Treasury yields are weighing on gold, which has risen to a two-week high.
The 100-day moving average at around $4,331 and the 50.0 Fib retracement level at approximately $4,328 are providing technical support for gold. However, these levels are in close proximity to each other, making it difficult for gold to hold on to its value if they are broken.
A bigger concern is the potential head-and-shoulders formation that has emerged since August, with the neckline situated around $4,290 to $4,310. If gold breaks below this zone, the 61.8 Fib retracement level near $4,241 would come into view, and some analysts believe a drop towards $4,000 could occur.
Timing is crucial, as the Fed's decision on Wednesday will heavily influence gold's next move. Markets are pricing in a nearly 90% chance of a 25 bps rate hike, which could validate or surprise expectations.