Gold bulls cannot break 1330 as Fed raise 25bp

Fed press conference is now live.
The $1330 is still a line in the sand.
The FOMC is considered dovish by the market.

Flavio Tosti Independent Analyst

Gold is trading at around 1324 as the Federal Reserve hikes rates by 25bp as expected.

The Fed expects to hike only 3 times this year opposed to the 4 expected by the most hawkish market participants. 3 more rate hikes are expected in 2019 and 2 more in 2020.

The Fed sees 1.9% PCE in 2018 which stays unchanged from previous projections while unemployment is seen at 3.8% in 2018 and 3.6% in 2019.

Fed says: “The economic outlook has strengthened in recent months,” but offered only “a limited dot-plot upgrade: The Fed only went half-way in upgrading the dot-plot. Significant changes for 2019 and 2020 but a minimal one for the long term and no change for this year.” according to FxStreet’s analyst Yohay Elam.

Gold daily chart:

The bulls are 5 points away from the 1330 psychological level while challenging the bearish trendline.

Gold 5-minute chart:

After the 25bp rate hike decision gold went higher and tested 1328 after which it sold off 8 dollars to rebound and make another attempt at 1328. Gold can't find yet a direction, but holds near its daily highs. The press conference might provide some fresh clues.

Author

Flavio Tosti

Independent Analyst

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