© Dukascopy Bank SA
"Continued strength in the dollar is weighing upon precious metals following the Fed's rate announcement and we are likely to see recent low prints once again tested over the short term."
- MKS Group (based on CNBC)
Pair's Outlook
Yesterday the bullion depreciated very substantially, by losing more than $20 per troy ounce. Market realized the importance of this week's Fed decision and the Dollar rallied afterwards. XAU/USD pierced through the first support at 1,062 (weekly S1), but was eventually stopped by another weekly demand at 1,050. Both Dec 3 low and 2010 low at 1,046/44 were not touched, but it can happen next week. For Friday, we expect more cautious trading and profit-fixing, meaning gold prices will probably bounce back in the direction of 1,060/65 where it will again meet the weekly S1.
Traders' Sentiment
Even despite a sharp plunge in gold prices in the past 24 hours, the total percentage of SWFX long open positions increased only marginally to 60%. Still, it signals about some profit-taking by the short traders.
© Dukascopy Bank SA