Gold trades at its highest level since 14 June 2018
Buyers are threatening a real break but may have to wait for the Fed meeting tomorrow before we see the next leg higher. Price is now running into some resistance from the June 2018 high @ $1,309.37 but a hold above $1,300 is already great win for buyers in terms of the psychological battle.
Price threatened a dip below the big figure yesterday but managed to recover and with the dollar looking shaky ahead of the Fed tomorrow, gold buyers are capitalising on that at the moment. That said, be wary of the resistance level above as it could help to limit gains before we find out more on what the Fed has in store for markets tomorrow.
A more dovish tilt could help give a further boost for emerging market currencies and commodities and any hint of confirmation of an early end to the central bank's balance sheet runoff may provide a second wind for gold to rally further.
The January seasonal pattern boost for gold may be coming to a halt with the Lunar New Year just around the corner now, but you can't argue with technical indicators either. Look towards Powell's press conference for how the Fed is viewing market risks at this point in time. That could provide a big clue on how dovish the Fed is and if that helps to send gold above the June high, expect price to take off as buyers will find another leg in the run higher here.
