- Gold eases to the $5,250 area from fresh record highs at $5,311.
- Precious metals tick down from highs with investors positioning for the Fed’s decision
- XAU/USD looks overstretched after rallying for eight consecutive days.
Gold (XAU/USD) is trading higher for the eighth consecutive day on Wednesday. The precious metal, however, has pulled back from all-time highs at $5,311 in the European session, returning to the mid-$5,200s as investors take positions ahead of the US Federal Reserve’s monetary policy decision.
The Fed is almost certain to leave interest rates at the current 3.50%-3.75% range and hint at a steady monetary policy in the coming months. This event takes place amid unprecedented pressure from the Administration to lower interest rates and speculation that US President Trump might steal the show by disclosing the name of the next Fed Chair.
Technical analysis: Next upside targets are $5,310 and $5,455
XAU/USD keeps marching higher despite the recent pullback, with all signs pointing to an overstretched rally but no hints of a trend shift in sight. The Moving Average Convergence Divergence (MACD) stays in positive territory but has cooled from recent peaks, hinting at moderating upside momentum. The RSI (14) is at levels that normally anticipate a corrective reaction.
Immediate resistance aligns at the $5,311 all time high. Further up the 261.8% Fiboonacci extension of the January 16-21 rally, near $5,455 emerges as the next target. On the downside, the pair might find support at the previous record high, near $5,100, ahead of the January 26 low, at the $5,000 area.
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