Tomorrow’s FOMC Comments Will Move Gold

Tomorrow afternoon, the Federal Open Market Committee (FOMC) will conclude its two day meeting. At this time, the central bank is expected to cut the Fed Funds Rate by 25 basis points to 1.75% – 2.00%. Traders and investors should note that this rate cut is already factored into the market. The FOMC statement could be more important to the market than the actual rate cut itself. Often, during a central bank announcement precious metals, bond yields, the U.S. Dollar Index (DXY) and equities will all be in play and that will likely be the case again tomorrow.

Gold and the precious metals have been pulling back recently. Gold futures (GC) put in a short term pivot top on September 4, 2019 at $1566.20 an ounce. Since that high pivot gold futures have declined back down to 1512.00 an ounce. Should the FOMC sound a bit hawkish (less easy money) the gold market could retreat a little more. If the central bank comes out and is very dovish (more easy money) then gold could move back up to its old highs in the near term. So traders and investors will have to listen carefully to the statement and wording of the Federal Reserve. In the case of gold weakness tomorrow, traders should watch for major daily chart support around the $1450.00 level.

Nick Santiago

InTheMoneyStocks