Gold is trading at $1946.97 at the time of writing. If the Fed pauses their rate hiking campaign – then they will lose any credibility they had left. However, if the Fed cuts rates – that will look like a panic move, which could spark a bigger crisis.
Gold price reaction to the FOMC meeting will depend on whether the FOMC leans more toward respecting their mandate and attacking inflation with higher interest rates in the current and future Fed meetings, or if they show cautiousness to prevent more issues in the financial system.
Gold price trims 3% after peaking above $2,000 at the start of the week. The market’s full attention is on FOMC meeting, with consensus expecting a 25-bps dovish rate hike. Federal Reserve members showed hawkish rhetoric before blackout period, and before the US banking crisis as well.
Future rate hike projections will determine if the gold uptrend can keep going. Gold price is quietly trading below $1,950 on Wednesday during the European session as the market pauses action ahead of a decisive FOMC interest rate decision on Wednesday.
Tags FOMC Meeting Gold interest rate hike
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