Sevens Report: Gold Holds Bullish Bias After Less-Hawkish Fed

While not a bullish gamechanger, the net impact of Wednesday’s Federal Reserve decision will be to support a year-end rally and the reason is clear: The Fed wasn’t as-hawkish-as-feared. On the charts, gold remains rangebound between support at $4,200 per ounce and resistance at $4,400, observes Tom Essaye, president of the Sevens Report.

Commodities were mixed for most of the day Wednesday as traders awaited the conclusion of the Fed meeting. However, the less-hawkish cut the FOMC delivered sparked risk-on money flows in afternoon trade that saw economically sensitive industrial metals and energy futures outperform. Gold turned positive but lagged on the session.

Still, it lurched higher in after-hours trade to up 0.48% in part because the Fed announced a 30-day bond buying spree totaling $40 billion. Risks are still skewed to the upside in the direction of the dominant, primary uptrend that’s been in place all year.

Technical View: Gold market volatility has picked up in Q4 with risks of intermittent, deeper pullbacks elevated. However, the long-term trend remains bullish.

• Primary Trend: Bullish (since the week of Nov. 27, 2023)
• Key Resistance Levels: $4,290…$4,344…and $4,398
• Key Support Levels: $4,134…$4,045…and $3,941.