Gold Price Easing Ahead of FOMC Rate Decision
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Gold price, FOMC news and analysis:
- The gold price is under modest downward pressure ahead of the US interest rate decision Wednesday.
- The FOMC will likely keep all its monetary policy settings unchanged.
Gold price edging back pre-FOMC
A likely decision by the US rate-setting Federal Open Market Committee to leave all its monetary policy settings unchanged Wednesday is helping keep traders’ risk appetite healthy, boosting stock markets and weakening the gold price modestly.
Gold Price Chart, 15-Minute Timeframe (April 26 – May 1, 2019)
Chart by IG (You can click on it for a larger image)
The US stock market hit a new record high Tuesday, as measured by the S&P 500, as eyes turn to the Federal Reserve. It will likely keep its benchmark Federal Funds rate at 2.25%-2.50% – ignoring a call by US President Donald Trump to cut its overnight lending rate by a full percentage point and renew its quantitative easing program.
As ever, attention will center on comments by Fed Chairman Jerome Powell at a press conference after the decision, which will come against the background of a healthy economy. US GDP grew at a better-than-expected 3.2% annualized in the first quarter of the year and non-farm payrolls data due this coming Friday are expected to show another rise of around 185,000.
Sentiment has been boosted further by the resumption of US-China trade talks but the FOMC will still likely tread cautiously as inflation has weakened this year and a long pause is now probable.
That means safe-haven gold could suffer as traders opt for riskier assets, even though the US Dollar basket, which measures it against a range of other currencies, continues the slide lower that began last Friday and would usually be expected to give the precious metal a boost.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.