Gold Enters Consolidation Phase as Markets Await FOMC Decision

Gold (XAU/USD) appears to have entered a consolidation phase and was last spotted ranging above the $1,950 mark in the early European session.

It seems likely that investors have moved to the sidelines (neither bullish nor bearish) in anticipation of the highly influential FOMC decisions set for later today.

Many analysts expect the Fed to keep its policy measures unchanged and possibly assume a dovish stance in its monetary policy, given the worsening Coronavirus outbreak.

This coupled with the political standoff over an additional round of stimulus package in the US has cast a strong bearish tone over the greenback. The USD index has now fallen well below 2-year lows, which has bolstered the dollar-denominated commodity even further.

The combination of these factors provided a strong prospect for further gains in the yellow metal, although caution should be taken considering that we’re in overbought conditions on daily charts.

Nonetheless, we are likely to remain in this consolidation phase until the FOMC decisions.

Gold (XAU) Value Forecast — July 29

XAU/USD Major Bias: Sideways

Supply Levels: $1,963, $1,980, and $2,000

Demand Levels: $1,950, $1,930, and $1,915

Gold has witnessed a modest retrace just as projected and has bounced back above the trendline. The FOMC decision will take center-stage in today’s price action and we’re not likely to see any significant move until then.

Overall, the bias remains strongly in favor of the upside and the $2,000/oz price tag remains the focus.

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