Gold ‘Paused’ Ahead of FOMC Policy Announcement

Gold ‘Paused’ Ahead of FOMC Policy Announcement


Gold prices edged lower Monday, as markets await a decision from the Fed policy makers Wednesday.

Both the Bank of England and the Bank of Japan are scheduled to make monetary policy decisions too.

While the Fed is expected to keep rates unchanged there is a chance that the Fed will cut rates. Most believe the Fed will remove the patience language in their statement, setting the stage for lower rates when they meet in July.

The current Fed funds futures predict a 20% change of the Fed lower rates when they meet Tuesday and Wednesday.

Technical Analysis: Gold prices edged lower and continue to trade sideways ahead of the FOMC meeting this week.

Support is seen near the 10-Day MA at 1,333.

Resistance is seen at the June highs at 1,358.

Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. The fast stochastic is printing a reading of 82, above the overbought trigger level of 80, which could foreshadow a correction.

The RSI (relative strength index) has reversed lower coming from an overbought territory which reflects accelerating negative momentum. Medium term positive momentum is decelerating, as the MACD (moving average convergence divergence) histogram is printing in the Red with a downward sloping trajectory which points to lower prices.:

Gold prices moved sideways ahead of a busy week that includes monetary policy decision from the Fed, BoE and BoJ.

Investors await a decision on whether their will be a meeting between Presidents Trump and Xi at the G-20 meeting which is scheduled for late this month.

US Treasury yields finished a bit higher, and the USD continued to consolidate its recent gains generating some headwinds for gold prices.

Note: gold is priced in USDs, a stronger USD makes it more difficult for gold prices to rise.

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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