Golden Expectations - Analyzing the Rise And Fall In Gold Price Following Crucial Federal Reserve Meeting

• The Federal Reserve has paused further interest rate increases to prioritize economic stability
• The announcement from the Federal Reserve induced volatility in the gold market, with gold prices experiencing a downturn.
• Despite the market’s prevailing uncertainty, gold has demonstrated resilience, securing a 5% increase for the year.

In a move to prioritize economic stability, the Federal Reserve has decided to hold off on further interest rate increases.

Since March 2022, they have raised rates 11 times, but have also taken a cautious approach by keeping rates steady twice.

This commitment to ensuring stability is evident in their recent decision to maintain the current lending rate, with the aim to mitigate any potential negative effects.

The gold market witnessed volatility in reaction to the Federal Reserve's announcement. Prior to the disclosure, gold had been climbing up, registering a 0.82% increase for the day.

However, with the revelation of the news, gold's fortune took a downturn, causing its price to plummet back to its opening level for the day.

On Thursday, the bearish sentiments continued, as the decline from Wednesday persisted.

The price of gold not only retreated but also broke down through the previous all-time high and the daily 200 simple moving average, currently at $1920.

This development signals a significant shift in the market, raising concerns of further weakness.

As we explore the technical analysis further, we identify the next support level at the October 2012 high of $1795.

Interestingly, this level closely aligns with the weekly 200 simple moving average, making it a potential area for a reversal.

The price movement of gold has been marked by oscillation between $1614 and $2081 since August 2020, showcasing the market's prevailing uncertainty.

Despite gold surpassing the $2000 mark in the past, it is important to highlight that no monthly candle has closed above this psychological threshold.

This phenomenon emphasizes the significance of the $2000 mark as a significant barrier, a level that the price finds difficulty in breaking through and sustaining a trend.

Amidst market fluctuations and reactions, gold has demonstrated its resilience and inherent value by securing a 5% increase for the year.

This showcases its ability to withstand economic uncertainties and varying market conditions.

After the closing bell on Wednesday, September 20, the stock closed at $1930.78, trading down by 0.05%.