The price of gold per ounce (XAUUSD) is at 1,967.48 after the Federal Reserve increases interest rates by 25 basis points, which was anticipated.
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- Fed hikes rates by 25bps as expected.
The Gold price has been whipsawed after the Federal Reserve, Fed, raised its interest rate decision by a 25 bps rate hike to 5.25-5.50%, as expected. At the time of writing, Gold is volatile between $1,973 and $1,965 so far as the market digests the statement and key points as follows:
As a result of the statement:
Traders now await to hear from the Chairman, Jerome Powell who will be speaking to the press at the top of the hour.
The hawkish outcome could be that:
”Chair Powell emphasizes that actions taken since March have prevented credit conditions from tightening significantly. Meanwhile, labour market conditions and consumer spending remain too strong. Powell signals that more interest rate increases are likely needed,” analysts at TD Securities said.
The base case, the analysts said:
”We expect Chair Powell to reiterate that the Fed remains data dependent and that economic data since the June FOMC meeting is yet to show convincing signs of slowing (despite nascent evidence of cooling inflation). Powell will also underscore that September is a “live” meeting.”
Dovish scenario, the analysts said:
”Powell mentions that the best course is to be patient given the totality of policy tightening and the ongoing reduction of credit supply. The chair plays up the recent deceleration in inflation as a positive sign and suggests that a soft landing is becoming more likely.”
Ahead of the Fed, daily and 15 min chart:
Gold price update, after Fed statement and interest rate decision:
So far, the price holds in bullish territory while on the front side of the trendline and above yesterday’s highs and the day’s low. $1,963 and $1,975 are the breakout levels.
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