Gold stays poised in waiting on the Fed this week | investingLive

Can the gold bugs make it five in a row this week? That will hinge on the Fed decision of course. Powell & co. will be the decisive factor in impacting broader market sentiment in trading this week and gold will be no exception.

Buyers made a play in a breakout of the consolidation range since the end of May, pushing price above $3,500. Since then, the upside momentum has stalled a little last week as we await the Fed this week. And in the run up to the FOMC meeting, we are likely to see more waiting and meandering in prices around the top of the range here.

As mentioned numerous times already, gold currently has a multitude of factors working in its favour. And the Fed looking to ease sooner than anticipated is just another tailwind to add to that. So, a more dovish communique this week would not only weaken the dollar but keep gold underpinned in defying the September seasonal play.

But even if the Fed does try and keep markets guessing on October and December, the bigger picture for gold is largely supportive. And amid any technical corrections or pullbacks, the play is still very much to be buying on dips.

With US economic data softening and the dollar still facing an identity crisis amid the policy incoherence from the US administration, there’s still strong conviction to be staying long in gold especially with central banks globally also continuing to step up purchases in the precious metal.