Gold rallies to monthly highs after dovish FOMC day

Key Support: 1825
Key Resistance: 1833 – 1850

Gold is very bullish. I’ve been saying this for months. The hedge against inflation is this metal and even though price action has been VERY volatile and choppy most of the time; long term the bullish structure is in play.

On Wednesday, Gold saw by the end of the day an influx of buying volume after Chairman Powell’s press conference where he centered the attention on current and near future high inflation and the Fed keeping the pace of this round of QE to continue to boost the economy which is still suffering from the Pandemic (and current increases in cases) shutdown. The Fed had 2 choices, to fight inflation now and hike rates and start tapering down its asset purchasing program or to continue to boost the economy with its inflationary program. They chose the latter.

This was extremely bullish for Gold. We saw a +2.25% rally from Wednesday’s lows to yesterday’s highs. The level capping the upside in Gold id this month’s highs (1833). The last time price traded at this level Gold dipped 2.5% in a very long (1 month long) ABC pullback.

Today’s trade is an easy break of the monthly highs on a very tight daily range.