FOMC minutes release is a key macro event of the day. Document will be released at 7:00 pm BST and will relate to the June 13-14, 2023 meeting. Fed decided to keep rates unchanged at that meeting but at the same time it has made a hawkish revision to dot-plot, suggesting two more rate hikes this year. Fed Chair Powell has stressed it during his semiannual testimonies in Congress as well as in his comments at ECB central banking forum in Sintra, Portugal. Other Fed members also said that there is still work to do on inflation. Having said that, it will be interesting to see whether minutes include any explanation why rate hike was not appropriate at June meeting.
A hawkish minutes that ensure investors that Fed remains on a hawkish path could have a negative impact on precious metals, including GOLD. Taking a look at GOLD chart at H4 interval, we can see that the precious metal has been trading in a downward channel since early June 2023. GOLD has recently climbed and tested the upper limit of the channel in the $1,930 area but failed to break above. Price continues to trade nearby but one cannot rule out declines resuming in-line with a trend, especially if FOMC minutes are a hawkish surprise. On the other hand, a dovish reaction to the document could provide fuel for a break above the $1,930 resistance zone, what would allow it to paint a higher high and invalidate a downtrend sequence.
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Source: xStation5
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