Gold is showing little movement on Wednesday, as the pair has been listless since sharp losses started off the week. In the European session, the spot price stands at $1198.03. In the US, the FOMC will release its policy statement, and we’ll get a look at November CPI. The markets are expecting a small decline of 0.1%.
The Federal Reserve will be in the spotlight on Wednesday, as the FOMC issues its monthly policy statement. With the US economy continuing to grow, the markets are confident that the Fed will take action and raise interest rates in the first half of 2015. One key question is whether the Fed will adjust its forward guidance; that is, will the Fed make use of policy statements to provide the markets with more information about its projections regarding interest rate policy. If this does occur, there will be less uncertainty about the Fed’s monetary policy and this could boost the US dollar against its major rivals.
Gold prices started the week with losses, as the metal shed about 1.8% of its value on Monday, closing at $1198. Gold continues to trade close to the key $1200 level on Tuesday. Why the sharp drop on Monday? One reason is last week’s US numbers, as solid employment and retail sales numbers helped boosted the dollar. As well, the markets are expecting a bullish view of the US economy from the Federal Reserve policy statement on Wednesday.
XAU/USD for Wednesday, December 17, 2014
XAU/USD December 17 at 11:15 GMT
XAU/USD 1198.03 H: 1201.67 L: 1194.49
- XAU/USD ha been flat in the Asian and European sessions, as the pair continues to hug the 1200 line.
- On the upside, 1200 is under strong pressure. 1215 is stronger.
- 1175 is an immediate support level.
- Current range: 1175 to 1200
Further levels in both directions:
- Below: 1175, 1156 and 1130 and 1111
- Above: 1200, 1215, 1240, 1255 and 1275
OANDA’s Open Positions Ratio
XAU/USD ratio is almost unchanged on Wednesday. This is consistent with the lack of movement we’re seeing from the pair. The ratio has a majority of long positions, indicative of trader bias towards gold breaking out of range and moving to higher ground.
- 13:30 US CPI. Estimate -0.1%.
- 13:30 US Core CPI. Estimate 0.1%.
- 13:30 US Current Account. Estimate -98B.
- 15:30 US Crude Oil Inventories. Estimate -2.6M.
- 19:00 US FOMC Economic Projections.
- 19:00 US FOMC Statement.
- 19:00 US Federal Funds Rate. Estimate <0.25%.
- 19:30 US FOMC Press Conference.
*Key releases are highlighted in bold
*All release times are GMT