- Fed hikes rates by 25bps, sticks tot he plan despite risks.
- The gold price is now above the hourly moving averages
- The DXY has fallen within the day's range of 93.54 - 94.03, currently trading at 93.67.
Currently, the price of gold has turned bullish and has made a session high of $1,301.04/oz as the dollar changes course and sells off; Gold was initially offered on the knee-jerk market reaction to the outcome of the FOMC. As widely expected, the Fed hiked rates by 25bps and stuck to their script, despite global risks. Gold dropped to a low of $1,292.05 from a starting point and pre-FOMC announcement rate of $1,299.69.
Key FOMC takeaways
- Projection is for 2.4% from 2.1% last with 4 rate hikes in 2018.
- The Fed Sees 3 hikes in 2019 to 3.1% from 2.9%.
- The Fed has raised their GDP outlook to 2.8% from 2.7%.
- The Fed has lowered their unemployment to 3.6% from 3.8%.
- The Fed sees core PCE by the end of 2018 at 2.0% from 1.9%.
- The Fed sees PCE inflation at 2.1% from 1.9%.
From Powell's presser:
- Jerome Powell speech: No comments on specific changes to the trade policy
- Jerome Powell speech: Rates expected to move closer to neutral level over the next year or so
- Jerome Powell speech: Too soon to declare victory on inflation
- Jerome Powell speech: Will hold press conferences after each FOMC meeting from January onwards
However, in the volatility of the market, the dollar has erased all of its gains with the 2-year and 10-year Treasury yields also dropping back post-Powell's presser. The DXY has fallen within the day's range of 93.54 - 94.03, currently trading at 93.67.
The yellow metal's price is now above the hourly moving averages RSI flat remains longer term. As far as the moving averages go, the 100-W SMA is a key downside target at $1,277/oz. $1,324/oz comes as the key upside target on a breakout of the consolidating around the $1,300 handle. Importantly, gold has been holding above the previous weekly low down at $1,282. The 21-D SMA at 1296 is key that opens up the 200-D SMA, at 1307, ahead of the 100-D SMA, (1324), that guards a reversal to the key $1,360 level.
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