Gold Price Forecast: XAU/USD dips on Fed reaction
- Fed keeps rates unchanged as expected at 5.25-5.50%.
- The Summary of Economic projections implies one more 25 bps rate hike this year.
- US Dollar rises sharply after the FOMC statement, weighing on Gold.
Gold took a step down on reaction to the Federal Reserve's (Fed) rate call for Wednesday, with the XAU/USD testing the waters in the $1,940.00 region.
The Fed kept its benchmark interest rate at 5.5% as investors broadly anticipated, but the US central bank saw an uptick in their forward-looking inflation expectations.
Markets are seeing the 1-year Fed inflation expectations lifting half a percent to 5.1% from the previously recorded 4.6%.
The XAU/USD fell off the $1,946.00 level after the release, declining into challenge range of the $1,940.00 handle.
Read more:
Fed Statement comparison: September vs July
Breaking: Fed leaves interest rate unchanged at 5.25%-5.5% as expected
Author
Joshua Gibson
FXStreet
Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.
