Gold prices hold steady as all eyes turn to the Fed [Video]

Phil Carr The Gold & Silver Club

Gold prices hovered near two-week highs on Wednesday as traders await the outcome of the U.S Federal Reserve's two-day policy meeting.

Since the Fed’s last policy meeting in January, a lot has changed. The U.S. Senate passed President Joe Biden’s massive $1.9 trillion stimulus bill. Treasury yields have surged to pre-pandemic levels and inflation has now taken over from COVID as the biggest risk to the market.

Earlier this month, Fed Chair Jerome Powell disappointed the markets by stressing that inflation was not a concern for the central bank, while ignoring questions about rising bond yields.

Higher yields are starting to sound alarm bells, as this is a very strong indicator that inflation is already creeping into the wider global economy.

The Fed has been largely ignoring the issue so far, which is why all eyes will be on the Fed Chair Jerome Powell as he holds his press conference after the central bank's interest rate announcement on Wednesday.

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

Author

Phil Carr

The Gold & Silver Club

Phil is the co-founder and Head of Trading at The Gold & Silver Club, an international Commodities Trading Firm specializing in Metals, Energies and Soft Commodities.

EUR/USD loses further momentum, revisits 1.1930

EUR/USD surrenders further ground and approaches the 1.1930 region, or daily troughs, on Wednesday. The pair has retreated from a five-year high as US Dollar demand picks up again, with traders turning cautious ahead of the key Fed meeting later in the European evening.

GBP/USD remains offered, focus is on 1.3750

GBP/USD is clocking marked losses near the 1.3750 zone midweek. Cable’s pullback comes as the Greenback stages a robust bounce, with traders taking profits and squaring positions ahead of the Fed’s key policy announcements later in the day.

Gold retreats from record highs ahead of Fed’s decision

Gold now gives away part of the earlier bull run to all-time highs past the $5,300 mark per troy ounce on Wednesday. Investors continued to seek out traditional safe havens amid persistent economic and geopolitical uncertainty, with markets also staying cautious ahead of the FOMC event later in the day.