By Ahmad Assiri

Gold posted notable moves last week following the Fed’s decision of a 25-basis-point rate cut, coupled with a more cautious stance going forward, decision prompted the yellow metal to test the resistance range near $2,600 level before finding support and rebounding toward $2,620.

These developments come against a backdrop of market concerns over the pace of inflation, and expansionary fiscal policy outlook – factors that have lent gold solid support. The precious metal is expected to remain within a comfortable sideways channel between $2,620 and $2,660 during the holiday period, aided by seasonally lower trading volumes.

The aforementioned levels will be crucial for short-term price action. Gold could see further upside if inflationary worries intensify later on, or if the Fed signals further shift in its rate path.

Assiri is Research Strategist at Pepperstone