GOLD remained motionless ahead of the Fed meeting
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The Federal Reserve will announce its March monetary policy on Wednesday. Experts expect the benchmark rate to remain unchanged, along with the quantitative tightening program. The focus will be on forward guidance, with the Fed likely stating that they won't lower borrowing costs until there is more confidence in inflation reaching 2 percent.
The Fed may raise its GDP and core PCE deflator forecasts due to economic resilience and persistent price pressures. This could lead to a reduction in expected rate cuts for 2024 from three to two.
The following table shows projections from the December FOMC meeting.
If the Federal Reserve signals a greater inclination to exercise patience before removing policy restraint and shows less willingness to deliver multiple rate cuts, we could see U.S. Treasury yields and the U.S. dollar charge upwards in the near term, extending their recent rebound. Meanwhile, stocks and gold, which have rallied strongly recently on the assumption that the central bank was on the cusp of pivoting to a looser stance, could be in for a rude awakening (bearish correction).
Resistance: 2166 - 2175 - 2182
Support: 2146 - 2140 - 2137 - 2125
The Fed may raise its GDP and core PCE deflator forecasts due to economic resilience and persistent price pressures. This could lead to a reduction in expected rate cuts for 2024 from three to two.
The following table shows projections from the December FOMC meeting.
If the Federal Reserve signals a greater inclination to exercise patience before removing policy restraint and shows less willingness to deliver multiple rate cuts, we could see U.S. Treasury yields and the U.S. dollar charge upwards in the near term, extending their recent rebound. Meanwhile, stocks and gold, which have rallied strongly recently on the assumption that the central bank was on the cusp of pivoting to a looser stance, could be in for a rude awakening (bearish correction).
Resistance: 2166 - 2175 - 2182
Support: 2146 - 2140 - 2137 - 2125
Nota
If the Federal Reserve signals a greater inclination to exercise patience before removing policy restraint and shows less willingness to deliver multiple rate cuts, we could see U.S. Treasury yields and the U.S. dollar charge upwards in the near term, extending their recent rebound. Meanwhile, stocks and gold, which have rallied strongly recently on the assumption that the central bank was on the cusp of pivoting to a looser stance, could be in for a rude awakening (bearish correction).Nota
Gold turned down to $2,157After rising more than $10 to above $2,164, gold is now back down to $2,157.
Today's focus is on the Fed's monetary policy decision and Fed Chairman Powell's speech.
Nota
Gold prices rose after the Fed's decision and the decline in the US dollar and yields. The indication of three rate cuts this year is negatively affecting the dollar. To understand the Fed's monetary policy outlook, traders should closely follow Chairman Powell's press conference. However, today's reaction may change due to the upward revision of the long-term equilibrium rate.Nota
Gold continued its bullish run after Wednesday’s FOMC meeting provided the catalyst. Bullish continuation was something highlighted in the previous gold update, as long as prices consolidated above the prior all-time high of 2146.80 – which they had.Nota
After the Fed meeting, gold prices are expected to reach the resistance level at $2,222/ounce. If this level is surpassed, it is likely that prices will reach between $2,228 - $2,234/ounce. In the long term, the Fed plans to cut interest rates three times this year starting in June, which will lead to a decline in USD compared to other currencies.Nota
World gold spot price is around 2,165 USD/ounce, down more than 16 USD/ounce compared to the same time yesterday morning.Gold prices on the international market continue to decline because the USD has not stopped its rise. Specifically, the Dollar-Index - measuring the strength of the greenback compared to 6 major currencies, increased sharply by 0.42% to 104,075 points at 6:05 a.m. this morning.
Nota
Technically, the next support level for gold prices next week is at 2,145 USD/oz. If it stays above this level, gold prices will likely increase again next week. However, if next week's gold price is pushed below this level, it may adjust to below 2,100 USD/oz, followed by the important support area of 2,041-2,067 USD/oz.The trading plan (reference) for next week will consider buying around 2077 and selling around the 2200 round resistance mark.
Nota
World gold prices had a good week of increases due to predictions that they will continue to rise. The US Federal Reserve plans to reduce interest rates, which is expected to start happening from next June.
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