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Gold shows moderate growth in anticipation of the FOMC meeting results

Gold finished trading in Asia with a modest 0.25% gain. The dynamics of trading on Asian stock exchanges had a positive impact on gold. Major indices closed with a slight decline.

Expectations of the results of the two-day FOMC meeting have a restraining effect on the market today. Of particular interest are the updated forecasts for rates and key economic indicators. Some investors do not exclude an earlier rate hike amid rising inflationary expectations and higher bond yields. Hints from the Fed about a possible increase in interest rates in 2023 (earlier than forecast) could lead to a serious strengthening of the dollar and a decrease in the value of gold and other commodity assets. But, according to most experts, Powell will refrain from talking about tightening monetary policy due to persisting problems in the labor market and uncertain economic prospects. The dovish tone of the Fed and Powell's statements may put pressure on the dollar and government bond yields. In this case, gold may continue corrective growth.

Until the announcement of the results of the Fed, the fundamental background and the technical picture for gold are likely to remain bearish.

Other metals are mixed today. Silver is holding close to the day's opening levels. Palladium and platinum are trading less than 1% lower.

As expected earlier, the price continues to hold within the boundaries of the horizontal channel 1722.70-1741.00. Most likely, until the end of the FOMC meeting, trading will be held within this range. After that, a scenario with a false breakdown of the level of 1741.00 and a decline in quotations towards the level of 1700.00 is seen as more probable.

  • Resistance levels: 1741.00, 1760.00, 1810.00.
  • Support levels: 1722.70, 1700.00, 1680.00.

The main scenario is consolidation in the range 1722.70-1741.00

An alternative scenario is a breakdown of the support at 1722.70 and a decline to 1700.00.

The current fundamental background is neutral. We consider shorts from the level of 1741.00.

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