Gold Price Forecast: XAU/USD pops and drops on Federal Reserve interest rate decision
|- Gold price rallies to session highs on the Federal Reserve statement and interest rate decision.
- Gold price prints a high of $1,966.55 and pulls back ahead of Federal Reserve chairman Jerome Powell´s presser.
Gold price rallies some $20.00 on the knee-jerk reaction to the Federal Reserve´s interest rate decision and statement. At the time of writing, Gold price is trading near $1,962 and up 1.14% on the day from a low of $1,934.
Federal Reserve hikes rates by 25 bps, as expected but the Fed statement deleted reference to 'ongoing increases' in rates. Ahead of the decision, the money markets were pricing in a year-end target rate of 4.36%. This has dropped in volatile reactions to the statement to 4.26%.
Key points so far
- The median forecast shows rates at 5.1% end-2023, 4.3% end-2024.
- 'Some additional policy firming may be appropriate.'
- FOMC deletes reference to ongoing increases.
- US banks are sound, resilient but events to weigh on growth.
- Likely to see tighter credit conditions that weigh on economic activity, hiring and inflation.
Next up will be the Federal Reserve´s chairman Jerome Powell whop will speak to the press.
Fed hikes policy rate by 25 bps as expected, focus shifts to Powell – LIVE
Gold price technical analysis
(Daily and H1 charts, ahead of the Fed, above and below respectively)
Gold price reaction to the Fed
On the knee-jerk to the decision, Gold price rallied as follows:
(5-min charts)
The price popped and dropped as markets await Fed´s Powell.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.