After the Fed's recent policy meeting, gold futures experienced a significant drop of 2% during the night. The central bank's indication of fewer rate cuts in 2025, while inflation concerns remained persistent, sent shockwaves through the investor community. This decision had a profound impact on the market sentiment and the performance of gold futures.
Unraveling the Aftermath of the Fed's Policy Move on Gold
Daily Chart Analysis
On the daily chart, gold futures are clearly showing a bearish trend, despite a slight uptick on Wednesday. The price has dipped below the crucial 100-day Moving Average, which is set at $2,634. The recent formation of an exhaustive candle suggests strong selling pressure, further fueling the bearish sentiment in the market. This indicates that the bulls are losing their grip, and the bears are likely to continue their dominance in the short term.
Gold futures are currently struggling to break through the resistance at the 100 DMA. A breakdown below the uptrend channel today could potentially trigger a massive selling spree. Investors need to be cautious and closely monitor the market动向 as any further decline could lead to significant losses.
4-Hour Chart Outlook
The 4-hour chart presents an even more concerning picture. A bearish crossover has occurred as the 20 DMA and 9 DMA have fallen below the 200 DMA. With gold futures trading below the 9 DMA at $2,641, the bearish momentum seems to be intensifying heading into Thursday and Friday. This suggests that the short-term trend is likely to remain bearish, and traders should be prepared for further downside.
However, it's important to note that any upward movement could present an opportunity to establish short positions just beneath the secondary resistance at the 20 DMA, which is currently at $2,674. Traders need to carefully analyze the market conditions and make informed decisions based on their risk tolerance and investment goals.
Conclusion and Disclaimer
In conclusion, gold futures are likely to continue their descent into Friday, given their position below the 100 DMA. The bearish trend seems to be firmly in place, and prices are headed towards the next major support at the 200 DMA, which is currently at $2,497. However, it's important to remember that this analysis is based on observations and should not be considered as investment advice. Investors should conduct their own research and assess any potential positions in gold futures independently.
