Gold rises, investors eye FOMC statement

Gold has edged higher in Tuesday trading, as the upward movement continues this week. In the North American session, the spot price for one ounce of gold is $1307.38, up 0.28% on the day. For a second straight day, there are no major U.S. indicators. On Wednesday, the Federal Reserve releases its monthly policy statement.

Gold prices are sensitive to interest rate policy, so traders should be prepared for some movement after the Fed wraps up its policy meeting. Even though the Fed is widely expected to hold the benchmark rate at a range between 2.25 – 2.50 percent, there could be significant news from policymakers. The Fed has been sending a dovish message to the markets, and if the rate statement is more cautious about the U.S. economy than expected, investors could get nervous and boost gold prices. The Fed’s balance sheet will also be under scrutiny, with policymakers expected to announce when they will intend to reduce the $4 billion balance sheet. The Fed has been reducing assets by $50 billion a month, but there has been criticism that this tightening is choking economic growth. An easing in policy makes the dollar less attractive and would be bullish for gold. As well, the Fed will publish its new dot plot, which is used to convey its interest rate outlook.

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XAU/USD Fundamentals

Tuesday (March 19)

  • 10:00 US Factory Orders. Estimate 0.3%. Actual 0.1%

Wednesday (March 20)

  • 14:00 US FOMC Economic Projections
  • 14:00 US FOMC Statement
  • 14:00 US Federal Funds Rate. Estimate <2.50%
  • 14:00 US FOMC Press Conference

*All release times are EST

*Key events are in bold

XAU/USD for Tuesday, March 19, 2019

XAU/USD March 19 at 12:30 DST

Open: 1303.73 High: 1310.93 Low: 1302.93 Close: 1307.40

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1261 1284 1306 1326 1344 1365

XAU/USD posted gains in the Asian session. The pair edged higher in European trade but then retracted. XAU/USD The pair is steady in North American trade

  • 1306 has switched to a support role after gains by XAU/USD on Tuesday
  • 1326 is the next resistance line
  • Current range: 1306 to 1326

Further levels in both directions:

  • Below: 1306, 1284, 1261 and 1243
  • Above: 1326, 1344 and 1365

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.