Gold – Edging higher again ahead of the Fed decision

  • Will the Fed leave the door open to another hike?
  • Dot plot key for expectations
  • Gold nears key resistance ahead of decision

The Fed meeting today is widely expected to end in an agreement not to hike interest rates this month with the key takeaway being whether they intend to again in this cycle.

The ECB strongly hinted that it is probably done last week but I’m not convinced we’ll get the same signal from the Fed and neither, it would appear, are markets.

We have seen the odds of another hike creeping up a little recently amid more resilience in the economy which will likely make the central bank a little apprehensive about declaring victory or even suggesting they believe they’ve done enough.

If they are so bold as to follow in the footsteps of the ECB, it will be interesting to see what that does to yields and the dollar.

Rebound stalls ahead of the Fed

The gold rebound had stalled over the last couple of sessions but it is edging higher again today going into the announcement.


Source – OANDA on Trading View

The yellow metal is trading at the highest level since the start of the month which is quite a bullish move in the hours leading up to the decision. Perhaps it’s a sign that markets are expecting a dovish Fed.

It’s struggling around $1,950 which is around the previous high and the 61.8% Fibonacci retracement level – July highs to August lows. A break above here could be quite a bullish move, especially if backed by a dovish Fed announcement.

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam