Gold, FOMC and US Dollar Talking Points:

  • Gold price weaken in front FOMC
  • XAU /USD ignores UK CPI data – All eyes on Fed
  • The strength of the US dollar remains a key catalyst for the impending move

Gold prices seek clarity from the Fed

Gold prices ignored a higher-than-expected impression of the UK CPI as investors focus on the FOMC’s rate decision later today.

Visit the DailyFX Educational Center to discover how CPI data affects currency pairs

As a hedge against inflation, a shift in risk sentiment and more hawkish rhetoric from Fed Chairman Jerome Powell continued to weigh on Bullion as investors anticipate the likelihood of a higher rate hike. sooner than expected in an effort to control inflation.

Although the Fed, BoE (Bank of England) and ECB (European Central Bank) all remain under pressure to combat the effects of inflation, the rapid spread of the Omnicron variant has once again forced governments consider putting in place more stringent restrictions which could further hamper the pace of economic recovery and, in turn, the pace of decline.

Gold prices (XAU / USD) stutter before FOMC - All eyes on Fed

DailyFX Economic calendar

Yes central banks maintaining a more accommodating position, gold prices have the ability to go up, at least temporarily.

Gold Price Analysis

At the time of writing, gold prices are trading in an area of ​​confluence, between Fibonacci 2020 and 2021 move levels.

After falling below channel support at the end of last month, US dollar strength and rate hike expectations allowed bears to push price action back to critical support, currently holding on tight psychological level $ 1,760 which coincides with the 50% retracement of the 2020 move.

Meanwhile, the Commodity Channel (CCI) index has fallen back towards the lower end of the range, a potential indication that the bearish path may continue to persist, at least for now.

Gold daily chart

Gold prices (XAU / USD) stutter before FOMC - All eyes on Fed

Graphic prepared by Tammy da costa using TradingView

Gold weekly chart

Gold prices (XAU / USD) stutter before FOMC - All eyes on Fed

Graphic prepared by Tammy da costa using TradingView

Golden feeling

Gold prices (XAU / USD) stutter before FOMC - All eyes on Fed

Gold: At the time of writing, Retail traders data shows that 84.25% of traders are net long with a ratio of long / short traders at 5.35 to 1. The number of net-long traders is 10.25% higher than yesterday and 8.62% higher than last week, while the number of net-short traders is 16.43% lower than that of yesterday and 18.73% lower than last week.

We generally take a contrarian view of crowd sentiment, and the fact that traders are net long suggests that gold prices may continue to decline.

Traders are longer than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger bearish countercurrent trading bias in gold.

— Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @ Tams707

element inside

element. This is probably not what you wanted to do! Load your application’s JavaScript bundle into the element instead.

Source link