As a result of the significant depreciation of the US dollar after the FOMC meeting early this morning, the price of gold also rose brilliantly to record the latest high above last week's price level.
Signals of a slowdown in monetary policy tightening by the Federal Reserve (Fed) became clearer when interest rate hikes were raised by only 25 basis points at the latest meeting, as most had previously expected.
The follow-up speech by Fed President Jerome Powell was also delivered in a dovish tone where the slow increase in interest rates will continue for some time while the objective is still to lower the inflation rate to the 2% target.
Despite saying that it is not appropriate to lower interest rates, Powell did not deny that this could happen this year.
On the XAU/USD price chart, which measures the value of gold against the US dollar, the price has been flat around the 1925.00 level since the Asian session continued into the European session yesterday, finally rising after the FOMC meeting.
The price also jumped from the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the XAU/USD chart, giving a clearer bullish signal for investors.
The increase in the price of gold until the end of the New York session is seen to have succeeded in breaking through the target level of 1950.00 which was an obstacle for the price before.
Continuing trading today (Thursday), the price is flat above the 1950.00 level since the Asian session, but analysts expect the price movement to be more vigorous in the New York session.
Expectations of higher upside will continue for the price towards the next target which is at the height of 2000.00.
The last time the price tested the height zone was in April trading last year.
Although the tendency of the gold price is to go higher, it is not impossible that the direction of the price movement can change towards the end of this week.
Failure to hold above the 1950.00 level will push prices back down to previous focus levels.
The 1900.00 level is seen as a critical zone to re-target and there will definitely be an interesting reaction when the price reaches that area.
