Gold Analysis Ahead of FOMC

Gold prices continue to fall, spurred by a more robust ADP report and ISM Services PMI. Gold is in the negative mode with expectations for an early policy tightening from the Fed. Rising bank rate tends to undermine non-yielding metals. Because gold and silver usually lose their appeal when people expect interest rates to rise.

The US central bank will announce its decision today during US trading hours, but it has been confirmed whether they'll begin tapering soon afterward; we'll know more then.

The markets have been pricing in a potential interest rate hike to end the year, which will likely play into gold prices. The Federal Reserve is known for its monetary policy statement after meeting with Chair Jerome Powell at post-meeting press conferences when they announce what's going on in economic circles - including any news relating to an upcoming rise or decrease of borrowing costs from here on out.

So, if FED announces they are still optimistic about raising bank rates, gold must drop below $1750 and finally $1720 very soon.

The markets are currently watching the Federal Reserve determine how much stimulus and inflation there is. The mixed headlines over US economic stimulus have gold traders on edge, not to mention fresh fears of COVID-19 third wave that could hit this coming weekend or later next week.

If the covid-19 pandemic becomes the central issue again, we may see another big bounce from $1720/1725 to $1820/1835 price zone.

The gold market is a great place to invest in uncertain times. For example, most gold investors are focused on whether the Fed will taper their quantitative easing program very soon or not. Therefore, it's essential for gold traders and economists alike to watch all upcoming U.S economic reports that could affect currency values or inflation rates and keep in touch with us.