GOLD : FOMC Meeting

(Tue, 15 Dec 2020). The FOMC meeting tomorrow (Wednesday) is likely to be the last chance to inject some excitement into the financial markets this year as investors start to wind down ahead of the seasonal break. Risk sentiment continues to swing either way, but these moves are becoming increasingly smaller and volatility is being pared back. Tomorrow’s meeting and Fed chair Jerome Powell’s subsequent statement will lead the market into the end of the year, especially if the US dollar moves markedly from its current lowly value. The Fed is not expected to make any policy changes but will likely try and steer rates, and the greenback, lower to try and keep the nascent US recovery on track. While recent data has been mixed to mildly positive, any economic comeback is going to take a long time and low-interest rates will be required for years ahead.

Gold is trading either side of the 38.2% Fibonacci retracement level at $1,836.9/oz. while today’s price range is also be kept in check by the 20- and 200- simple moving averages. The 20-/200-sdma crossover on December 5 showed that the short-term sentiment is weak, while this would be confirmed if the 50-dsma (blue line) breaks below the 200-dsma.Initial support is seen just under $1,820/oz. ahead of a cluster of lows on either side of $1,800/oz. before the 50% Fibonacci retracement at $1,763/oz. comes into play. To the upside, $1,866/oz.(50-dsma) to the December 8 high at $1,876/oz. should provide reasonable resistance.

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