In this video we take a look at the price of Gold ahead of the upcoming Federal Funds Rate announcement. Will the Federal Reserve remain dovish and how will that affect the price?
Watch the video to learn more…
The price of Gold will be affected by the decision by the Federal Reserve this evening to slow the pace of tightening. As we have seen recently, the USD has weakened in anticipation of this event and the announcement could increase the pressure on the USD. Recent CPI data almost confirmed that the Fed will slow the pace of tightening going forward. But the language the Federal Reserve Chairman Powell uses in his press conference will allow us to identify the Fed’s outlook into the new year. If the pace of tightening will slow further the USD weakness will likely remain. If the Chairman hints of being aggressive on inflation again at some point then the USD could strengthen.
Currently the price of Gold is trading within a tight range between the price of $1814 and $1803. This range is small considering the range the price of GOLD typically moves in one day’s worth of market participation. Yesterday’s CPI number saw the price of Gold breach the $1800.00 resistance and saw the price move higher over 400 pips. Looking at today’s price action we can see the market in a small range anticipating a breakout on a dovish or hawkish tone. A dovish tone should see the USD weaken leading to higher Gold prices. On the other side of that a hawkish tone would see the USD strengthen and the price of Gold move lower.
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