Last week, the minutes pointed to an extremely cautious Federal Reserve (Fed) even before later economic data showed a sharp slowdown in hiring by US companies. Most investors however, thought the Fed’s first-rate hike in a decade should still come this year.
Overall, the Federal Open Market Committee (FOMC) still see risks to the downside for US real Gross Domestic Product (GDP) and inflation forecasts, with recent global growth and financial market developments worsening these downside risks.
The commodity since the beginning of the year fell more than 2.5% and is in a recovery since the beginning of October, trading above the 10 and 50-week moving averages. Last week gold rose with a narrow range and closed in the green near the high of the week. Stochastic is showing a strong bullish momentum and crossed above the 50 mid line.
Expecting an upward move to a key level at 1,227.12 on a break above a weekly resistance at 1,177.76 (scenario 1) or a bounce from a weekly resistance at 1,177.76 could push downward gold to a weekly resistance at 1,131.65 (scenario 2).