Gold plummets after FOMC meeting, challenges $1300
|Gold lost more than $10 in the minutes following the FOMC decision and the new economic projections. The greenback jumped in the market and US bond yields hit fresh highs. Now traders await Yellen’s press conference.
As expected the Fed kept rates unchanged and announced that it will begin to unwind the balance sheet in October. According to the Fed, hurricanes are unlikely to affect the medium-term path of the economy.
FOMC's decisions regarding monetary policy implementation - Sep 20, 2017
Gold drops sharply
The ounce was trading near daily highs around $1,313 and dropped, reaching a fresh 3-day low at $1,303. The yellow metal remains under pressure, challenging the $1300/05 support area. A brew below $1300 could favor a spike to the downside.
It the metal remains above $1,300 it could bounce to the upside. It needs to break clearly above $1,320 in order to gain support for a move higher.
Volatility is likely to remain elevated during Yellen’s press conference. Gold is moving strongly correlated (negative) with USD/JPY and US yields.
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