Gold Price Outlook – Gold Drops Ahead of the FOMC

Gold Technical Analysis

The gold market has drifted a little bit to the downside during the trading session here on Wednesday as we wait for the FOMC interest rate decision and perhaps more importantly, the overall tone of the statement and press conference. After all, this is a market that I think, given enough time, has to pay attention to what the Federal Reserve is doing, and for a couple of months now, we have been looking at the upcoming interest rate cut, which should be later on Wednesday, and pricing it on the market. Now the question is whether or not the market is going to get the other two interest rate cuts that it so desperately seems to want.

If it does not or something in the statement puts doubt into that, it’ll be interesting to see what happens. I assume the US dollar would pick up a bit of strength. That’s not completely out of the possibility of the Federal Reserve and its movement, mainly due to the fact that we see things like retail sales still red hot in America. We’ll just have to wait and see how they interpret some of the data.

With that being said, this is a market that needed a pullback anyway, so I welcome that pullback and I’ll be looking at the $3,650 level, and the $3,600 level as potential areas to bounce from. This, of course, assumes that we even get that drop. We’ll just have to wait and see. But either way, this is a market that is a little bit stretched, and I would anticipate a lot of volatility. I would also anticipate under most circumstances, any plunge in the price of gold later in the day as a potential buying opportunity.

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