Gold tests critical resistance as traders await key events

Gold price is running into a critical resistance area on all charts. Gold selloff could eventually lead to significant fears lest it should run towards $1,900.

Gold price is advancing on the day into the final push on Wall Street and rallied from a low of $1,917.22 to a high of $1,942 on the day so far. Gold is hovering at $1937 per ounce at the time of writing. The precious metal’s price surged to the highest in nine months as the US dollar as well as bond yields came under fresh pressure following the start of the week’s 1% drop in leading economic indicators in December.

The dovish sentiment has been boosted surrounding the Fed’s intention concerning the next policy decision. The Fed is expected to announce another interest-rate hike when its policy committee meets next week.

The US dollar is weakening, making the yellow metal more affordable for international buyers while the Fed officials are out on the blackout week ahead of the highly anticipated Fed interest rate decision.

Gold price flourished with investors now awaiting US economic data due this week that could impact the Federal Reserve’s policy path.

Investors are all eyes on the Fed, most expectations indicate the possibility of a 25-basis point hike on February 1 policy statement, after slowing Fed’s pace to 50 bps in December, following four straight 75-bp hikes.