Gold Prices Wait on Central Bank Monetary Policy Decisions

goldThe 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

David Frank

David Frank

Chief Market Strategist at CupO'Forex
David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.
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David Frank
David Frank