Talking Points:
- With the Fed expected to alter their forward guidance Gold prices have eased
- Gold looks to test the intraday low from November—$1,130.10
- Gold contracts for April delivery slid to a low of $1,141.6 today
With an inverse relationship to the U.S. dollar, Gold has been trading in a downward channel for much of this year. Currently the precious metal is looking to test the intraday low from November—$1,130.10. The recent push lower is rooted in FOMC meeting expectations, and is reflected in the price of future contracts.
In tomorrow’s announcement, the Federal Reserve is expected to alter their forward guidance, shifting monetary policy towards a normalized state. More specifically, the Fed will likely remove any restrictive language capable of preventing a potential mid-year rate increase. The heightened interest, invoked by the views of committee members shared on March the 5th and 9th:
“Assuming that things unfold along the lines I’ve forecast, I think that by mid-year it will be the time to have a serious discussion about starting to raise rates.” –John Williams, President FRB of San Francisco
“Indeed, if incoming economic information continues to support my forecast, I would be comfortable with liftoff in the first half of this year.” –Loretta Mester, President FRB of Cleveland
As listed on the COMEX division of the NYMEX, contracts for April (the most actively traded) slid to a low of $1,141.6 today after previously settling at $1,153.2.
Gold Daily Chart
Chart Created by Walker England Using MarketScope2.0
