FOMC statement will be announced at 21:00 MT (GMT+3) on Wednesday, July 27. In the previous article, we have already mentioned the importance of this event. Analysts and traders will closely follow this meeting since the Federal Reserve statement about interest rates might make a huge effect on markets.
The must-watch comment is the one on tapering. This is what will determine whether gold rallies or sells off after the Fed meeting. And with growing concerns that the US economy will slow in the second half of the year, tapering might no longer be as urgent as it seemed just a few weeks ago.
If the Federal Reserve gives any kind of signals about stimulus tapering, it will put a negative effect on gold. On the contrary, if there are no sings of tapering, gold will get a boost.
The price is consolidating under the 200-period moving average. RSI oscillator got close to the buying zone. MACD shows that the bearish trend got weaker since June. Dovish FOMC statement could help gold to break the 200-period moving average, which is highly important resistance. After the break, the price will have lots of space above. Targets will be $1830 and $1877, which are 38.2 and 50.0 Fibonacci levels respectively.
On the flip side, if FOMC gives signals about stimulus tapering, the price will drop and test 23.6 and 0.0 Fibonacci levels, which are $1772 and $1680 respectively.