A dovish hike may be a hard sell, as Nomura suggests, but precious metals may have already priced in a specific rate trajectory. The U.S. dollar carry trade is the most crowded trade and by significant margins, according to Bank of America Merrill Lynch Survey of Global Fund Managers.
If Yellen choreographs a dovish hike, the dollar trade could begin to unwind causing relief in battered ; and gold and silver will benefit.
Gold has been trading in a range, and price action is forming a small, symmetrical triangle on the . The results of the FOMC, and surrounding rhetoric, will pave the way for the yellow metal. If there is a more hawkish tone, gold could trade lower to $1,035, while a more dovish tone may send gold to restest resistance at $1,194/97.
Silver is a little tricky because it is more tied in with economic growth than . The beaten down commodity will see relief if the dollar bulls take some off the table, but poor economic data may still be a hindered to silver . If were to pick up, consider that for silver .
If can get a boost, expect silver to trade higher to $14.52 with the potential of $15.30 (highly dependent on the outcome of the dollar). Conversely, selling pressure could cause silver to test significant support levels at $13.12.
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