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XAUUSD - Settles Around $1500 as Fed Releases Minutes

   

In the last four weeks gold has settled around the current key $1500 level, moving back and forth around this level. Earlier last month gold fell sharply from its multi year highs above $1550 down back below the $1500 level however it has been well supported and it has kept its head about this key level. It was support from $1500 that allowed it to make a run and push higher to achieve a six year high above $1550 before the recent drop down to $1500. 

Should gold break lower through $1500 and remain below there, it may start to meet resistance at this level. At the start of August, gold surged higher off support at $1400 towards the recent six year high above $1530, before its more recent surge higher yet again.

It was well supported by the $1400 level throughout July, and any time it has moved lower, it has been quickly bought up and supported, pushing it back above this level. If gold was to decline from its current highs, you could reasonably expect it to receive support from $1400 again. In late June, gold enjoyed a strong surge higher through resistance at the $1350 level, which had been repelling prices despite multiple rallies to push through that level, after having provided stiff resistance to gold on numerous occasions in the last couple of years. The $1350 level is also likely to offer support to gold should it decline from its current levels.

Leading up to its recent range below $1350, gold surged higher to move sharply away from the key $1270 level, through any resistance at $1300 and to a then one year high just shy of the $1350 level. It had been content for the week or so prior to enjoy support from the $1270 level, a level which had ably support the precious metal for the last six weeks or so, despite its best efforts to push lower.

The U.S. Federal Reserve (Fed) have released minutes from its September meeting where the central bank approved a quarter-point rate cut.  The main themes were the concerns over the trade wars and their impact on the economy and growth as well as market expectations.  Fed members said that while they saw U.S. growth as generally solid, the forecast risks “were tilted to the downside.”  “Important factors in that assessment were that international trade tensions and foreign economic developments seemed more likely to move in directions that could have significant negative effects on the U.S. economy than to resolve more favorably than assumed,” the minutes said.  “In addition, softness in business investment and manufacturing so far this year was seen as pointing to the possibility of a more substantial slowing in economic growth than the staff projected. The risks to the inflation projection were also viewed as having a downward skew, in part because of the downside risks to the forecast for economic activity,” the summary continued.  Fed officials also noted that “a clearer picture of protracted weakness in investment spending, manufacturing production, and exports had emerged.”

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