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:
Federal Reserve statement, and keynotes
- Fed says FOMC vote was unanimous.
- CBO revises 2023 us real Gross Domestic Product growth forecast to 0.9% from 0.1% forecast in Feb due to H1 labour market strength.
- Fed: Will consider extent of additional firming to curb inflation.
- Fed: We will continue to reduce our bond holdings as described in previously announced plans.
- Fed: Tighter credit conditions are likely to weigh on economic activity, hiring and inflation, extent to which remains uncertain.
- Fed: Recent indicators suggest economic activity has been expanding at a moderate pace vs a modest pace in June statement.
- Fed: We will continue to assess additional information and its implications for policy.
- Fed: Banking system is sound and resilient.
As a result of the statement:
- Interest rate futures put chance of Fed hike at 18% in September, 36.5% in November post-FOMC.
- Probability of Fed hike was 18.9% in Sept, 37.3% in nov pre-FOMC.
Gold price technical analysis
Ahead of the Fed, daily and 15 min chart:
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Gold price update, after Fed statement and interest rate decision:
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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.
(Click on image to enlarge)
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