Gold Depreciates Ahead of U.S. FOMC Interest Rate Decision, $15+ Volatility Likely; Jan 27, 2021

U.S. FOMC Interest Rate Decision & Press Conference

U.S. has scheduled to release FOMC interest rate decision at 1900 GMT/0030 IST followed by Press Conference at 1930 GMT/0100 IST. The FOMC statement is the primary tool the FOMC uses to communicate with investors about monetary policy. It contains the outcome of their vote on interest rates and other policy measures, along with commentary about the economic conditions that influenced their votes. Most importantly, it discusses the economic outlook and offers clues on the outcome of future votes.

During December FOMC meet, Powell said, the economy should perform strongly in the second half of 2021. In addition, he announced to buy bonds until substantial progress made on their targets. Powell added that they will give “ample warning” before tapering bond purchases.

Today scenario is different in the U.S. as today is the first FOMC meet under Biden’s government. Day by day, more Americans are getting vaccinated. On the other side, U.S. stocks are near to their record highs and stimulus package declared by Biden is the key topic for all. Markets expect interest rate will remain unchanged and don’t expect any surprises from the Fed. Still how Powell conducts the Press Conference will remain important for today’s meet, will he conveys hawkish or dovish message?

Let’s see how Gold has reacted during the previous data release:

Dec 16:

Nov 05:

Technical View:

XAU/USD (Gold): Gold weakens sharply and touches $1,837 mark in early U.S. session. The pair made intraday high at $1,853 and low at $1,837 mark. A sustained close above $1,852 will check key resistances at $1,862, $1,867, $1,872 and $1,885 mark respectively. Alternatively, a consistent close below $1,840 will check key supports at $1,837, $1,832, $1,827 and $1,815 mark respectively.

Take a look and do trade wisely!
Good Luck

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