Gold turns negative as Fed signals two more rate hikes

  • Gold drops from near $1300/oz to the lower limit of the current range..
  • Federal Reserve raises rates as expected, signals 2 more hikes

The US Dollar gained momentum across the board after the release of the FOMC statement. Gold dropped from $1,297/oz to $1,293.50 approaching daily lows. The move lower was boosted by a stronger greenback.

Despite the move lower, gold was still holding on top of the daily low and also above the $1,290 zone that is relevant short-term technical levels. XAU/USD continues to move sideways, below $1,300 with the momentum favoring a test of the lower limit.

The rate hike was fully priced in. The USD rose boosted by the FOMC staff projections. The median forecast signaled two more rate hikes for 2018. The statement and the projections also sent US yields to the upside and US equity prices lower.

XAU/USD Short-term Levels to watch

To the upside, resistance levels might be located at $1,303, $1,307 and $1,318. On the flip side immediate support lies at $1,292 followed by $1,288 and $1,282.

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