Gold is up to test the $1,300 psychological level as the dollar flips over in FOMC volatility
|- Fed hikes rates by 25bps, sticks tot he plan despite risks.
- The gold price is now above the hourly moving averages
- The DXY has fallen within the day's range of 93.54 - 94.03, currently trading at 93.67.
Currently, the price of gold has turned bullish and has made a session high of $1,301.04/oz as the dollar changes course and sells off; Gold was initially offered on the knee-jerk market reaction to the outcome of the FOMC. As widely expected, the Fed hiked rates by 25bps and stuck to their script, despite global risks. Gold dropped to a low of $1,292.05 from a starting point and pre-FOMC announcement rate of $1,299.69.
Key FOMC takeaways
- Projection is for 2.4% from 2.1% last with 4 rate hikes in 2018.
- The Fed Sees 3 hikes in 2019 to 3.1% from 2.9%.
- The Fed has raised their GDP outlook to 2.8% from 2.7%.
- The Fed has lowered their unemployment to 3.6% from 3.8%.
- The Fed sees core PCE by the end of 2018 at 2.0% from 1.9%.
- The Fed sees PCE inflation at 2.1% from 1.9%.
From Powell's presser:
- Jerome Powell speech: No comments on specific changes to the trade policy
- Jerome Powell speech: Rates expected to move closer to neutral level over the next year or so
- Jerome Powell speech: Too soon to declare victory on inflation
- Jerome Powell speech: Will hold press conferences after each FOMC meeting from January onwards
However, in the volatility of the market, the dollar has erased all of its gains with the 2-year and 10-year Treasury yields also dropping back post-Powell's presser. The DXY has fallen within the day's range of 93.54 - 94.03, currently trading at 93.67.
Gold levels
The yellow metal's price is now above the hourly moving averages RSI flat remains longer term. As far as the moving averages go, the 100-W SMA is a key downside target at $1,277/oz. $1,324/oz comes as the key upside target on a breakout of the consolidating around the $1,300 handle. Importantly, gold has been holding above the previous weekly low down at $1,282. The 21-D SMA at 1296 is key that opens up the 200-D SMA, at 1307, ahead of the 100-D SMA, (1324), that guards a reversal to the key $1,360 level.
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