Gold bears bracing for Fed’s verdict inside $25 range

Gold traders prepare for the end of two-week-long choppy moves between 200-DMA and an ascending trend line from early October with eyes on the US Federal Reserve (Fed) decision. With the faster tapering and a hint to rate hike in 2022 expected, bears are hopeful. However, Omicron fears are up for throwing a wild card and can fuel the precious metal prices should the Fed sounds cautious. In that case, a clear run-up beyond the 200-DMA level of $1,794 won’t be enough as the $1,800 threshold will act as a validation point to welcome the bulls. Following that, $1,815 and $1,834 should offer buffers before directing the quote to $1,850 and November’s peak of $1,877.

Meanwhile, a downside break of the $1,770 support confluence, comprising a 10-week-old rising trend line and 50% Fibonacci retracement (Fibo.) of August-November upside, will direct bears towards $1,745 and $1,721 support levels. If the gold sellers keep reins past $1,721, the $1,700 threshold and the yearly low surrounding $1,668 will be in focus. Overall, gold prices remain vulnerable to the downside but surprises lurk behind the door, be cautious!