Gold gains 1% on dovish Fed

FXStreet (Mumbai) - Gold prices advanced more than 1% as the treasury yields and the US dollar dropped after the FOMC statement was highly dovish and Yellen stayed non-committal on the timing of the liftoff.

Hovers at November 2014 low

The metal currently trades around the November 2014 low of USD 1132.90/Oz levels. The safe haven metal, has been a major victim of the rate hike talks, that began in Q4 2014. However, the dovish Fed today pushed rate hike bets lower, weakened USD and pushed up gold prices.

Meanwhile, oil prices fell back into the red , while stock prices in the US gave up part of their gains, indicating markets could be taking the dovish Fed as a negative sign. A risk aversion could add to the yellow metal’s strength, especially since the talk of a rate hike could take a backseat in the near-term.

Gold Technical Levels

At USD 1131/Oz levels, the immediate resistance is seen at 1132.90 (Nov 2014 high), above which the prices could rise to 1169 (Aug 24 high). On the other side, support is seen at 1113.55 (50-DMA) and 1100 levels.