Buyers Consolidate Gains Before the FED, After Gold Price Surge
Gold continues to show resilience, remaining above the $2,000 level since the second week of December. This week the price of Gold has been trending higher and as we approach the FED meeting, buyers are attempting to make a break to the upside, which shows that the market is leaning on Gold just in case the FED sounds more dovish than previously.
Earlier this week Gold climbed on geopolitical tensions, reaching $2048.60, but gave up the gains pretty fast, which also shows uncertainty among Gold traders. Today we saw another jump higher as US Treasury yields crashed lower following softer ADP employment numbers and lower employment costs for December. That pushed the price to $2,056, and this time XAU/USD is holding the gains, sonsolidating above $2,050.
During the beginning of the year until early February GOLD experiences increased demand usually, with the Chinese New Year celebration, which is also a reason for the bullish momentum this month. However, after the surge earlier, the volatility has declined as investors await the monetary policy decision by the FED which is expected to keep rates at 5.50% once again.
Gold Traders Focusing on Press Conference from Powell
So, the focus will be on the FOMC statement, the Dot Plot and the press conference from Chairman Jerome Powell, which will shed light on bank’s guidance and future expectation for interest rates. That will most likely influence the price action for the USD in the days to come.
The market players will focus on the details such as when the will begin lowering interest rates and by how much. Investors anticipate that the Fed will begin rate cuts in March, which would be bearish for the USD and bullish for Gold, probbly sending XAU toward $2,100 again. If it is confirmed today. On the other hand, if the FED mentions May as the start of the policy easing cycle, then the market might take that as tilting toward less-dovish, which would be positive for the USD and bearish for Gold.
Gold Live Chart
ABOUT THE AUTHOR
See More
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals