Before testing $1,850, gold seems to have lost its bullish momentum, with investors remaining on the sidelines ahead of the US Federal Reserve’s policy announcements on Wednesday, January 26. FXStreet’s Eren Sengezer highlights gold’s technical levels to watch for depending on the Fed’s policy outlook.

A hawkish Fed policy outlook could cap gold's upside

“The yellow metal is facing static resistance at $1,850. A dovish Fed should lift XAU/USD above that level and open the door for an extended rally toward $1,870, where the October-December uptrend ended.”

“On the flip side, $1,830 (Fibonacci 23.6% retracement) aligns as first technical support. With a daily close below that level on a hawkish Fed policy outlook, gold could slide toward $1,810 (Fibonacci 38.2% retracement, 100-day SMA) and $1,800 (200-day SMA).”

See – Gold Price Forecast: XAU/USD has to do more to prove it is ready to soar higher – DBS Bank