The price of PRECIOUS-GOLD found support at $1760 as the FEDs sounded some dovish tone last Wednesday.
On Wednesday, the price of gold fell from $1785 to $1760, just before the FOMC meeting. Price reversed from the $1760 support area as the interest rate was kept near zero. Gold has risen more than 3% since then, nearing its two-month high.
Spot Gold closed above its two-week high as price continued to rise despite the U.S. employment data increasing more than expected in October. Gold price closed at $1818 on Friday, according to data received from TradingView.
The limited reaction to the data shows “despite the strong labor market report, it is not going to change what Federal Reserve Chair Jerome Powell signaled this week,” said Edward Moya, senior market analyst at brokerage OANDA.
The Fed said on Wednesday it will begin paring its monthly bond purchases with plans to end them in 2022, but stuck to its long-held view that high inflation would prove “transitory” and likely not require a fast rise in interest rates.
Near-zero interest rates to spur economic growth during the COVID-19 pandemic have propelled gold prices to new highs over the last two years, as easy monetary policy cuts the opportunity cost of holding non-yielding assets.
The decision prompted benchmark 10-year U.S. Treasury yields to retreat from recent highs of around 1.6%.
On Thursday, the Bank of England kept interest rates on hold, wrong-footing investors who had been convinced that it would be the first big central bank to raise rates since the pandemic.
Last week, the demand for physical Gold in India, the world's second-largest consumer, jumped as buyers took advantage of a slight dip in prices and bought the precious metal during the festival season.
Buyers' momentum is strong as the price gets ready to clear the $1830 resistance level this week. If cleared, the price of gold will soar further as it will attract strong interest from traders and investors.
Nicholas Frappelll, a global general manager at ABC Bullion said: “A lot of investor interest is still mainly in equity markets, and until gold breaks above $1,835, it might not have enough momentum to attract strong interest”.
Spot Silver also gained as price reversed from $23 and rose to $24.16.
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