Gold Down Ahead Fed’s Meeting; Expect Fireworks

Gold and silver are trading down on the day as investors wait for the Fed and traders are positioning on USD. Palladium reaches fresh all-time highs.
Mauricio Carrillo
mound gold and dollar bill, finance concept

Gold is trading down on the day as investors are waiting for the Fed monetary policy decision scheduled Wednesday at 18:00 GMT. Silver is down too, but Palladium remains unbeatable amid supply deficit.

The Federal Reserve will conclude its 2-day FOMC meeting today at 18:00 GMT, 2:00 PM time of Washington. The market will be watching the statement and the projection materials.

Also, Fed’s Chairman Jerome Powell will be talking in a press conference at 18:30 GMT.

All eyes will be focused on the dot chart and the economic projections. It is expected to show that the Fed will cut the number of potential rate hikes.

The balance sheet will have its say also as the market will check how the Fed is planning to reduce its holdings of Treasury bonds and assets.

According to FX Empire analysts James Hyerczyk, a stronger dollar is also pressuring gold prices on the session. “The greenback is being supported by firmer Treasury yields as some safe-haven buying related to renewed concerns over U.S.-China trade relations.”

Gold Down On The Day, But It Holds Above 1,300 Ahead Of The Fed

XAUUSD daily chart Gold March 20

Gold is trading negative on Wednesday as a stronger dollar is pressuring the yellow metal down. Firmer treasury yields and a positioning trades ahead of the Fed is helping the greenback.

Currently, XAU/USD is trading at 1,304, 0.15% negative on the day as the unit is performing its first negative day in four.

The pair is contained by the 1,310 resistance but still supported by the 1,300 area.

According to Hyerczyk, gold will be affected by the fed announcement as it contains multiple components. “Firstly, there’s the economic projections which are expected to show the Fed will cut the number of potential rate hikes. This is potentially bullish for gold prices.”

In a bullish scenario, a break of the 1,310 area will open the doors to a rally up to 1,320 and 1,330. Then, a re-visitation of the one-year high of 1,346 will be possible.

To the downside, gold should get back below 1,300 to give hopes for bears. Next supports would be 1,290 and 1,280.

Silver Down As 20-Day Moving Average Pushed It Down

XAGUSD daily chart Silver March 20

Silver is trading down on the day as investors are also awaiting the Federal Reserve outcome. Technically, the 20-day moving average is pressuring down a pair that is showing sign of exhaustion.

XAG/USD is currently trading at 15.30, 0.30% down on the day. The pair is capped by the 20-day moving average that rejected the pair previously on March 13 and March 19. It is the first negative day for Silver in the last four.

To the downside, the pair has an open route to the 15.10 level, where the 200-day moving average is, and then the 15.00 critical support.

To the upside, XAU/USD should break above the mentioned 20-day moving average at 15.40; then, it will test the 15.60 area.

Palladium extends gains and reaches fresh all-time highs

Palladium is performing its eighth positive day in a row as supply crisis amid Russian exports ban is pushing prices higher and higher.

After reaching a fresh all-time high at 1,603, XPD/USD is currently trading at 1,597, posting 0.50% daily gains.

The 1,570 area now supports the pair.

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