Article by: ETO Markets

Happy Valentine’s Day.

The Federal Reserve may decide to hold off on decreasing interest rates until its June policy meeting, according to rumors stoked by a stronger-than-expected US inflation report released on Tuesday. This is one of the main factors supporting non-yielding bullion. An additional factor undermining the commodity appears to be the hawkish Fed views that continue to support rising US Treasury bond yields and help the USD maintain its strong overnight gains to the highest level since mid-November.

Technically speaking, some follow-through selling below the 100-DMA around $… could reveal the crucial 200-DMA support, which is now located close to the $… region. A strong breach below the latter will be interpreted by bearish traders as a new set-up for a further near-term decline. The immediate support is near December low at $...

Conversely, any attempt at a rebound over $… now appears to face strong opposition near $…. However, any follow-through purchasing might set off a short-covering rally that would push the price of gold up to the 50-DMA, which is presently around $…. This would lead to a further rise over the $… mark.