By: DailyForex.com

The XAU/USD pair closed yesterday’s session higher than opening after two consecutive days of losses. Gold strengthened against the American dollar after the U.S. Federal Reserve said that it will keep rates low for considerable time. The Federal Open Market Committee, as expected, announced that it will cut monthly purchases by another $10 billion to $35 billion at the conclusion of a two-day meeting yesterday.

Apparently the U.S. central bank didn’t give market participants what they have been waiting for (i.e. bringing rate hike expectations closer). Investors were also expecting the Fed to upgrade its economic projections but the central bank cut its growth forecasts for 2014 (from 2.8-3% to 2.1-2.3%). It seems that geopolitical jitters and weakness in the U.S. dollar will have an influence on gold prices for the rest of the week. Since today’s economic calendar is light, the major stock markets will be on my radar.

XAUUSD Daily 61914

The bulls are trying to protect their ground during the Asian session but they will need to pass through the ascending trend-line dating back to the April high of 1331.02 in order to tackle the 1286/8 resistance area (which happens to be 50% retracement level based on the bullish run from 1182.35 to 1392.04). Beyond that, the bears will be waiting at 1297 - 1300. However, if they fail to gain momentum and prices start to fall, expect to see some support between 1272 and 1267. Breaking below 1267 would suggest that the 1262 support level will be the next stop.

XAUUSD h4 61914

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