Today is the Fed rate decision. A critical day for gold. Because there is a Fed rate decision meeting. In addition, the critical interest rate decision will be announced at 21.00 in the evening. So, how will this decision affect the gold price? Let’s look at critical predictions.
Gold and Fed rate decision
Gold prices are following a movement focused on the Fed’s interest rate decision today. Accordingly, the expectation of a break in the interest rate hike caused some revival in the gold price. In addition, the decline in the dollar index also supported the gold price. The ounce price of gold is traded at $1,950. On the other hand, US gold futures also rose 0.2% to $1,962.90. Quantitative Commodity Research analyst Peter Fertig makes important comments on gold. Accordingly, after the CPI report, which came in line with the expectations, he says that the expectation that the Fed will keep the interest rates constant at the meeting and the weakening dollar support gold. In addition, the dollar index fell to the lowest level in the last 3 weeks, making gold more attractive to overseas buyers.
“The outlook (for the Fed rate decision) is that we are close to the top and that will reduce the dollar’s attractiveness a bit,” Fertig said. he added. Inflation is still double the US central bank’s 2% target, according to CME’s Fedwatch tool. On the other hand, the markets expect interest rate hikes by 95% in June and 63% in July. Clifford Bennett, chief economist at ACY Securities, said, “Although the Fed pauses rate hikes at this meeting, it will certainly continue its tightening trend in the future.” He’s using his expression. In addition, Bennett said, “The growing recognition that the Fed will not cut rates for the rest of this year has caused many investors to exit the gold market recently.” is emphasizing. Lastly, Bennet states that gold investors act cautiously before the Fed’s interest rate decision. However, according to him, gold will win in this fight.
What can Commerzbank strategists expect?
cryptocoin.com When we look at it as a whole, the stage is set for central banks. Commerzbank strategists discuss how the gold price will be affected after the Fed rate decision. Whatever decision is taken on interest rates, some market participants will revise their views, according to analysts. This means that the Gold price may enter a volatile session. Commerzbank strategists say the Fed has completed its rate hike cycle. Therefore, they see more upside risk to gold. However, there is no clear signal that the Fed’s rate hikes are over. It is also possible that he will leave the option to tighten his monetary policy further for now.
Depending on how open the door to future rate hikes by the Fed is, the positive impact of the current decision not to raise rates on price could evaporate very quickly. In March, only 7 out of 18 FOMC members approved higher interest rates than the current level. If this number increases significantly, the probability of a rate hike in July will increase. In this case, gold may be traded at even lower levels than before the Fed rate decision.
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