The price of gold extended downside movement on Wednesday, dragging the yellow metal to less than even $1150 ahead of some key economic events. The technical bias already remains bearish due to a Lower High and Low Low on various timeframes.
Technical Analysis
As of this writing, the precious metal is being traded around $1153. A support can be noted near $1142, the low of the recent downside wave ahead of $1130, the low of 2014 as demonstrated in the following chart.
On the upside, the pair is expected to face a hurdle near $1172, the 76.4% fib level ahead of $1200, the psychological number and then $1219, the 50% fib level. The technical bias will remain bearish as long as the $1132 resistance area is intact which is the high of last major upside rally.
FOMC Minutes
The Federal Reserve is scheduled today to release the minutes from the recent Federal Open Market Committee (FOMC) meeting. A hawkish stance about the benchmark interest rate will be seen as very bullish for the US Dollar and vice versa. If the FOMC members mull over an interest rate hike in near future then we may see strong selling pressure in the price of gold and other base metals.
Trade Idea
Considering the overall technical and fundamental outlook, buying the precious metal around $1150 could be a good option if we get a valid reversal candle in the form of a bullish pin bar or bullish engulfing candle. The trade should however be stopped out on a break below the $1130 support area as described above.
