The price of spot gold (XAU/USD) is consolidating tis morning. The Bank of Japan is waiting on the European Central Bank monetary policy decision due out later today. The Bank of Japan just announced that they were making no change to their monetary policy, massive quantitative easing program or interest rates.
Later this afternoon, the European Central Bank will announce its monetary policy decision. The ECB is expected to stay put on interest rates. The financial markets will look for signs from the ECB about to announce any changes to its bond buying plan in September.
As far as currencies are concerned, the euro had been on a wild ride for the last several weeks. This volatility came after hawkish comments from ECB President Mario Draghi. The euro, rose to a seven month high after those comments. The common currency then fell on talk that investors had misinterpreted the Draghi’s remarks. Gold investors are thinking about the appeal of non interest bearing assets. Gold traders are increasing their speculation that monetary policy normalization is happening sooner than later.
Gold Technical Analysis
The price of the bullion, as we look into today’s daily technical analysis, is trading sideways near the resistance level that lines up at $1,239.60 per ounce. A daily close above this first upside barrier challenges the next layer of technical resistance lining up at 1,261.15.
The alternative technical analysis, notes the first downside barrier that lines up at $1,239.60 per ounce. A break below this first downside barrier challenges the next layer of technical support lining up at 1,226.25