• The FOMC statement seen as dovish, investors dump USD 
  • Gold is bouncing from the 1304 level and is past the 1,310 level

Gold is trading at around 1,312 a troy ounce up 0.66% on Wednesday as the FOMC surprised the market with a dovish statement.

The Fed leaves rates unchanged as it was widely expected and a hike in June is still on the cards, however, the Fed may not be eager to keep inflation depressed.

On inflation the Fed says:

“On a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.”

The Fed sees things as “symmetric”. Analysts say that it implies that the Fed will allow inflation to run a bit high before moving hiking rates.

As a reminder, the US macroeconomic data has been rather constructive of late. Core Consumer Price Index (CPI) rose from 1.8% YoY to 2.1% in April while Core Personal Consumption Expenditure (PCE), the Fed's favorite gauge of inflation, increased from 1.6% to 1.9% in April and wage growth stood at 2.7% above 2.5% seen earlier.

The next event of significance that can move gold is the US Non-Farm Payroll scheduled on Friday at 12:30 GMT. 

 

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD falls below 1.1850 as US consumer sentiment beats

EUR/USD is trading under1.1850, off the previous levels as US consumer sentiment beat estimates with 78.9 points. The Fed refrained from adding more stimulus, supporting the dollar earlier in the week. Investors are eyeing fiscal stimulus talks.

EUR/USD News

GBP/USD falls as the EU reportedly objects Johnson's bill

GBP/USD is trading around 1.2950, off the highs. According to reports, the EU remains opposed to UK PM Johnson's controversial bill, which violates the Brexit accord. 

GBP/USD News

XAU/USD struggles to move back above 100-hour SMA

Gold regained some positive traction on the last trading day of the week and recovered a part of the previous day's losses to over one-week lows. The commodity held on to its intraday gains and traded above the $1950 level through the mid-European session.

Gold News

Ethereum hits Bitcoin's bid to lead the market

Bitcoin risks dominance after the strong rise of Ethereum. Technical indicators show some significant discrepancies keeping the stress on the board. Sentiment levels are improving and bordering on optimism.

Read more

After yesterday's JMMC meeting WTI settles near $40 per barrel

WTI has been through a rollercoaster this week. The liquid gold has been in a downtrend leading into the OPEC+ JMMC meeting and then reversed the whole move. At the meeting the group agreed to extend the compensation period for overproduction till the end of December. 

Oil News

Forex MAJORS

Cryptocurrencies

Signatures