Gold Traders Brace for Comments and Outlook By Fed this Week

Gold (XAU/USD) is trading on positive sentiment as we head into the Federal Reserve’s meeting scheduled to begin tomorrow. The uptick appears to be preparing the commodity for a breakout above its recent consolidation range.

A dovish stance by FOMC officials in the two-day meeting will likely re-establish a bullish sentiment for the yellow metal. Comments of fresh implementation of average inflation targeting could also bolster demand for gold in the near-term.

However, if the Fed decides to emphasize the downside risks plaguing the economy and the growing separateness between Wall Street and Main Street, the yellow metal could come under renewed pressure. A pessimistic outlook by the Fed could force gold lower as it incentivizes demand for safe-haven currencies like the US dollar (DXY).

Gold (XAU) Value Forecast — September 14

XAU/USD Major Bias: Bullish

Supply Levels: $1960, $1983, and $2000

Demand Levels: $1939, $1923, and $1906

The path of least resistance for gold appears to be towards the upside. The confluence of support at the $1939 level (strong support line and 50 SMA) will likely keep prop-up the XAU/USD in the near-term.

The commodity attempted yet another breakout today but was strongly resisted by the $1960 resistance/pivot area. However, we could see gold retest that line and likely break it in the near-term as demand picks up. This will help the commodity take back its place above the ascending trendline and battle with the $1983-60 pivot zone.

Meanwhile, the MACD is indicating that an upwards momentum is just beginning and that we could likely see the $2000 again.

On the flip side, a break below the $1939 confluence could propel gold to the $1923 once again, where the commodity will likely find strong demand once again.

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