The price of gold appeared to be moving to the beat of its own drum after failing to exhibit the bullish price action from 2020, and it remains to be seen if the decline from the record high ($2075) will turn out to be an exhaustion in the broader trend or a shift in market behavior as the low interest rate environment along with the ballooning central bank balance sheets no longer provides a backstop for bullion.
Nevertheless, the price action following the FOMC meeting raises the scope for higher gold prices as the US 10-Year Treasury yield extends the rebound from the weekly low (0.998%), and the precious metal may stage a larger recovery ahead of the next Fed interest rate decision on March 17 as Chairman Jerome Powell and Co. appear to be in no rush to further utilize its non-standard tools.
In turn, key market themes may continue influence financial markets as the US Dollar still reflects an inverse relationship with investor confidence, but a further rise in longer-dated Treasury yields may keep the price of gold afloat as the FOMC retains the current course for monetary policy.
With that said, the price action following the Fed rate decision raises the scope for higher gold prices as it trades to a fresh weekly high ($1876), and the precious metal may continue to retrace the decline from the monthly high ($1959) as it largely tracks the rebound in longer-dated US Treasury yields.
GOLD PRICE DAILY CHART
(Click on image to enlarge)
Source: Trading View
This content was originally published here.
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