Gold Prices Rebound Ahead of FOMC Rate Decision
- Gold Prices Rebound Ahead of FOMC
- Sentiment Figures remain Positive, reading at +1.62
- Looking for additional trade ideas for gold and commodities markets? Read our 2017 forecast
After declining last week from yearly highs, Gold prices are beginning to rebound ahead of tomorrow’s FOMC rate decision. Expectations for the event are set to see key rates held at 0.75%, and it should be noted that no press conference is schedule this cycle for Fed Chair Janet Yellen. Despite markets expecting little in the way of policy changes, traders should be reminded that this event can still drastically increase volatility for US Dollar based assets such as gold prices.
Technically, gold prices are rebounding and trading back above its 10 day EMA (exponential moving average), which is providing short term support at $1,199.85. This bullish resurgence in price, suggests that last week’s dip to $1,184.45 was simply a retracement in a developing uptrend. If gold prices continue to rally, traders will next target the standing 2017 high at $1,220.25. Alternatively, if the commodity stalls near present levels, a breakout under $1,180.65 may suggest a resumption of golds ongoing long term downtrend.
Gold Price Daily Chart & Averages
(Created Using IG Charts)
Traders tracking sentiment should note that SSI values for Gold remain off of extremes for the second consecutive week. SSI is now reading at +1.62, which is moderately higher than last week’s reading of+1.57. With 62% of positioning long, and 38% short, SSI carries a slightly bullish bias. If gold prices drop lower, it would be expected to see SSI move to a positive extreme of +2.0 or greater later in the week. Alternatively if gold rebounds further, SSI would be expected to move back towards more neutral values.
--- Written by Walker, Analyst for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.