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Gold Price Analysis: XAU/USD drops 0.5% on dollar strength

  • Gold drops as dollar gains on Fed statement. 
  • The yellow metal risks falling to its 50-day SMA support. 

Gold is feeling the pull of gravity on Thursday with the US dollar gaining ground against major currencies. 

The yellow metal is trading near $1,950 at press time – down 0.5% on the day. Meanwhile, the dollar index, which gauges the greenback's value against majors, is up 0.30% at 93.41. 

The dollar seems to be drawing bids on the back of the not-so-dovish Fed statement released Wednesday. 

From a technical analysis perspective, gold looks south, having faced rejection at the top end of a one-month-long descending triangle for the second straight day on Wednesday. 

The 50-day simple moving average (SMA) at $1,931 could offer support, which, if breached, would expose the lower end of the descending triangle, currently at $1,909. 

Alternatively, a daily close above Wednesday's high of $1,973 would revive the broader uptrend and open doors for a break above $2,000. 

Daily chart

Trend: Neutral-to-bearish

Technical levels

 

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