Rate cuts cause gold to jump whilst resistance remains in play
Gold jumped back above $1650 after Fed rate cute
The Fed decided to cut rates this morning by 50 basis points, causing several effects on the markets. Stocks and the USD moved lower but was expected to fall a lot more, given the announcement of a surprise rate cut.
The cut could be seen as a preventive measure against panic and economic global instability caused by the ongoing coronavirus. As a result of the cut, gold moved slightly higher but as the number of deaths in the U.S. continues to rise, analysts will see an ongoing economic impact from the virus.
Gold technically had a great session adding 3.48% and moved back above 16740. Below on the daily chart, we can see just how dramatic the one day move was. We can see the two support points below that offered demand on two occasions after been tested. The area we’re watching at the moment is the current point of supply. This is the current smaller grey box. To show that this was more than a single day event we would like to see buyers close above 1650. Continued holding by sellers around this area could suggest sellers maintain control and could start new test lower.