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Gold enjoys strong demand

Gold prices on Wednesday have been consolidating around $1,846/oz, which points to strong performance. Gold enjoys demand as a safe haven asset during market fluctuations. Right now, global investors need defensive assets as a hedge against shifting sentiment on global trading floors. US equity benchmarks have experienced sharp selloffs, with the S&P 500 index retracing to 6-month lows. It therefore makes sense that the markets are rotating back into gold.

The precious metal drew additional support from news that the IMF downgraded its 2022 growth estimates for the US and Chinese economies.

The Fed wraps up its rate policy meeting today, and gold could take a hit if a large-scale interest rate hike is announced. However, it makes sense to wait for the facts.

The technical picture shows that the $1,835 could be tested, and after that the door to $1,885 could be open.

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