Gold performed brilliantly in today's trading (Wednesday) by displaying a rising price pattern making investors optimistic for the commodity again ahead of the FOMC meeting.
Gold's recovery in the market was driven by the dismal performance presented by the US dollar in market uncertainty heading into the FOMC meeting early Thursday morning.
Thus, the pressure on gold began to fade and a surge in value could be observed again.
This situation translates into movement on the XAU/USD chart which measures the value of gold against the US dollar.
After the bearish pattern observed since the end of last week continued into the beginning of this week, the price failed to break through the 1950.00 level and instead bounced back up.
The increase that occurred in the New York session yesterday was seen to pass the Moving Average 50 (MA50) barrier in the 1-hour time frame on the XAU/USD chart, which is an indicator of a change in direction for the price of gold.
After briefly leveling off in the Asian session this morning around 1964.00, the price showed an increase at the beginning of the European session to surpass the 1970.00 level.
This is the highest level for the week with the expected increase still being able to be maintained, but investors will definitely be more cautious in the face of FOMC turmoil today.
If the rise continues, last week's high of 1987.00 will be retested and possibly surpassed.
A higher rise will change the gold price target to reach the 2000.00 level.
However, if the price plunges following the reaction to the FOMC meeting after this, the 1950.00 support zone will be watched for an indication of the direction of the gold price heading into the end of the week trade.
If it breaks through 1950.00, the price will reach the RBS zone (resistance becomes support) at 1930.00 and then the 1920.00 level on the further decline.
