The Fed is up in a number of buying and selling classes!

Will the central financial institution’s coverage determination prolong spot gold’s short-term uptrend?

In case you missed studying this week’s high financial occasions to be careful for, the FOMC is predicted to boost its rates of interest by one other 25 foundation factors to 4.75%.

However everybody and their momma already knew that.

Spot Gold (XAU/USD) 1-Hour Chart by TradingView

All of the drama will come from Jerome Powell’s presser the place the Fed Chairman will do his finest to speak {that a} slowdown in charge hikes DOES. NOT. MEAN. PIVOTING.

If Powell succeeds in speaking the Fed’s plan to proceed its hawkish path then spot gold – a secure haven that doesn’t yield curiosity – will lose its shine in opposition to USD.

That is dangerous information for gold bugs who’ve already misplaced the ball on the ascending channel sample on the 1-hour timeframe.

Not solely is XAU/USD buying and selling beneath the channel, it’s additionally buying and selling beneath the 100 and 200 SMAs for the primary time this 12 months.

A USD-friendly buying and selling setting could result in a bearish SMA crossover on the 1-hour chart and drag XAU/USD to earlier inflection factors like $1,900 or $1,880.

But when merchants see Powell’s hawkish messages and take them to imply “charge minimize possibly later this 12 months” then holding non-yielding gold could not sting as a lot as when USD is predicted to yield increased charges.

XAU/USD may return to buying and selling above the 100 and 200 SMAs and possibly revisit January’s highs close to $1,950.

What do you suppose? Can spot gold prolong an uptrend that began in November? Or is the commodity in for a reversal?

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