- Gold breaks under 1840$ and drops to the lowest in two days.
- US dollar remains mixed across the board as market participants await the FOMC statement.
- Wall Street opens in green, recovering from Tuesday’s slide.
Gold prices tumbled after the beginning of the American session. XAU/USD broke under 1840$ and quickly dropped to the 1830$ area, reaching the lowest level in two days. It remains under pressure ahead before the FOMC statement.
Probably technical factors weighed on the last leg lower in XAU/USD. The area around 1840$ offered support during several hours. Now the yellow metal is about to test the key $1830 support zone. A break lower would add more pressure, probably accelerating the decline. If XAU/USD holds above $1830, a rebound seems likely. The $1850 zone is the relevant resistance.
Market participants await the outcome of the FOMC meeting. The statement will be delivered at 19:00 GMT and could significantly impact gold prices. “A hawkish hold is widely expected as the Fed sets the market up for liftoff at the next meeting March 15-16. WIRP (Bloomberg World Interest Rate Probabilities) suggests a hike then is fully priced in, as are three more quarterly hikes this year. There won’t be any updated macro forecasts or Dot Plots for today’s decision, but we expect Chair Powell to send a very clear signal that the Fed is looking beyond recent stock market volatility and instead focusing on the tight labor market” explained analysts at Brown Brother Harriman.
“Markets will be keen to see any clues on how soon the Fed will allow balance sheet runoff. We had thought this would be a 2023 story, but given recent official comments and the Fed’s accelerated timeline, we believe runoff will begin in Q3”, said a BBH report. They warn of some possible “buy the rumor, sell the fact” price action after the decision that could send the dollar lower, and could benefit XAU/USD, particularly if the same behaviour takes place in the bond market.
Technical levels
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD favours extra retracements in the short term
AUD/USD kept the negative stance well in place and briefly broke below the key 0.6400 support to clinch a new low for the year on the back of the strong dollar and mixed results from the Chinese docket.
EUR/USD now shifts its attention to 1.0500
The ongoing upward momentum of the Greenback prompted EUR/USD to lose more ground, hitting new lows for 2024 around 1.0600, driven by the significant divergence in monetary policy between the Fed and the ECB.
Gold aiming to re-conquer the $2,400 level
Gold stages a correction on Tuesday and fluctuates in negative territory near $2,370 following Monday's upsurge. The benchmark 10-year US Treasury bond yield continues to push higher above 4.6% and makes it difficult for XAU/USD to gain traction.
Bitcoin price defends $60K as whales hold onto their BTC despite market dip
Bitcoin (BTC) price still has traders and investors at the edge of their seats as it slides further away from its all-time high (ATH) of $73,777. Some call it a shakeout meant to dispel the weak hands, while others see it as a buying opportunity.
Friday's Silver selloff may have actually been great news for silver bulls!
Silver endured a significant selloff last Friday. Was this another step forward in the bull market? This may seem counterintuitive, but GoldMoney founder James Turk thinks it was a positive sign for silver bulls.