Wednesday’s Federal Reserve meeting will also be a meeting where the Fed outlines its dot plot on rate projections. Interest rate markets are expecting no change from the Fed on Wednesday, so the forward guidance from the dot plot is going to be crucial in determining the Fed's intended rate path. Inflation expectations are falling, but the US economy is still strong, so there could be room for one more rate hike this year and higher rates for longer message.
The best situation for gold would be if the Federal Reserve indicated they could stop hiking interest rates and started to express concerns about the prospects of US economic growth. If the Fed did this, you would expect the dollar to fall, US yields to fall, and gold to move higher, However, it is unlikely that they give such a clear message like this.
It is worth being aware of a seasonal pattern for gold out of the Fed’s meetings over the last 15 years. Gold has gained over 55% of the time in the 15 days after the Federal Reserve's meeting. The average return has been 0.42% and the maximum game has been 13.97%. So with inflation expectations falling - will this be enough to decrease Fed hiking expectations and lift gold in the 15 days after the Federal Reserve meeting?
Major Trade Risks: The major trade risks here would be if the Fed signals a higher for a longer message.
Disclaimer: Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. seasonax GmbH neither recommends nor approves of any particular ...
Disclaimer: Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. seasonax GmbH neither recommends nor approves of any particular financial instrument, group of securities, segment of industry, analysis interval or any particular idea, approach, strategy or attitude nor provides consulting nor brokerage nor asset management services. seasonax GmbH hereby excludes any explicit or implied trading recommendation, in particular, any promise, implication or guarantee that profits are earned and losses excluded, provided, however, that in case of doubt, these terms shall be interpreted in abroad sense. Any information provided by seasonax GmbH or on this website or any other kind of data media shall not be construed as any kind of guarantee, warranty or representation, in particular as set forth in a prospectus. Any user is solely responsible for the results or the trading strategy that is created, developed or applied. Indicators, trading strategies and functions provided by seasonax GmbH or on this website or any other kind of data media may contain logical or other errors leading to unexpected results, faulty trading signals and/or substantial losses. seasonax GmbH neither warrants nor guarantees the accuracy, completeness, quality, adequacy or content of the information provided by it or on this website or any other kind of data media. Any user is obligated to comply with any applicable capital market rules of the applicable jurisdiction. All published content and images on this website or any other kind of data media are protected by copyright. Any duplication, processing, distribution or any form of utilisation beyond the scope of copyright law shall require the prior written consent of the author or authors in question. Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
