🥇 Gold trades lower ahead of FOMC decision

🔽 USD and gold drop ahead of FOMC decision (6:00 pm GMT)

The US dollar is trading lower against other major currencies while gold stays more or less flat ahead of today's FOMC monetary policy decision. Decision will be announced at 6:00 pm GMT and will be accompanied with release of updated economic projects and the so-called "dot-plot", that shows median expectations of FOMC members on interest rates. Powell's presser will follow 30 minutes later. Fed's intention to hike rates by 25 basis points was well communicated so attention will be on other things like expectations. Dot-plot released in December showed a median expectation of just 2 rate hikes in full-2022. Currently market prices in six 25 basis point rate hikes by the end of the year! Apart from that, investors will also look at hints on balance sheet reduction. More precisely, when the reduction will begin. Our preview of today's meeting can be found here. 

Taking a look at the GOLD chart at D1 interval, we can see that the precious metal is trading slightly lower on the day ahead of the FOMC monetary policy decision announcement. Gold price broke below the lower limit of the Overbalance structure earlier this week but has struggled with breaking below the $1,910 per ounce support later on. Gold price may get under pressure if Fed's dot-plot shows much higher interest rates expectations than the one from December 2021. In case a break below $1,910 occurs, the next target for sellers could be $1,875 support. On the other hand, should the Fed sound less hawkish than expected, gold may catch a bid and attention will shift to the $1,960 resistance.

Source: xStation5