Ichimoku Analysis (4-hourchart)
Tenken-Sen- $1644.82
Kijun-Sen- $1644.82
Gold declined sharply after the hawkish Fed rate hike. The central bank hiked its rates by 75 bpbs to a range of 3.75% to 4%." Ongoing increases in the target range will be appropriate to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time," according to a statement from the Fed's monetary-policy panel, known as the Federal Open Market Committee (FOMC). The yellow metal hits a low of $1619.87 and is currently trading around $1621.49.
Markets eye US ISM services PMI and initial jobless claims for further direction.
The US 10-year yield recovered nearly 8% after hitting a low of 3.91%. The US 10 and 2-year spread widened to -52 basis points from 23.9- bpbs.
According to the CME Fed watch tool, the probability of a 75 bpbs rate hike in Dec increased 48% from 34.10% a week ago.
Factors to watch for gold price action-
Global stock market- Bearish (positive for gold)
US dollar index – Bullish (Negative for gold)
US10-year bond yield- Bullish (Negative for gold)
Technical:
The near–term support is around $1617, a close below targets of $1600/$1550. The yellow metal faces minor resistance around $1635, the breach above will take it to the next level of $1650/$1660/$1675.Minor bullish continuation only if it breaks $1740.
It is good to buy on dips around $1605-06 with SL around $1580 for TP of $1670.
