Article by: ETO Markets
The US Dollar has gained strength, and the precious metal has been under pressure as Fed policymakers are becoming less certain that inflation will drop to the 2% objective. For a little longer, Fed officials intend to keep interest rates in the 5.25%–5.50% range in order to evaluate if the sticky inflation data from January was a one-time anomaly or a sign of trouble. The Fed does not appear to be in a rush to lower interest rates since doing so could increase the danger of inflation of persistent consumer prices.
The price of gold drops below $… for the second day in a row as investors seek new information regarding the outlook for interest rates. The precious metal is trading in a symmetrical triangle chart pattern, which indicates a sideways view in the near term.
Plotted from the high on December 28 at $…, the yellow metal declines after failing to test the downward-sloping boundary of the symmetrical triangle chart pattern produced on a daily time frame. The above-mentioned chart pattern's upward-sloping border is situated near the low of December 13 at $….
Any direction could result in the triangle breaking out. The chances, however, are somewhat in favor of a move in the trend's direction prior to the triangle's formation. A breakout would be indicated by a clear breach above or below the triangle boundary lines.
