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Gold grows in anticipation of the FOMC meeting results

Sep 16 2020, 01:15 PM (BDT) |

On Wednesday, gold shows a moderate upward movement vector. Demand for defensive assets remains consistently high due to the announcement of the two-day FOMC meeting results.


Many investors expect softer statements from the FRS. At the end of August, speaking at a symposium in Jackson Hole, Jerome Powell announced a new approach to inflation targeting and the need to keep interest rates low for a longer period of time. Most likely, based on the results of today's meeting, Powell will repeat the same statement.


The WTO's decision that the US violated international trade rules by imposing individual tariffs on Chinese goods raised the likelihood of escalating trade tensions between the US and China, prompting further fluctuations in the global market. Uncertainty is heightened by the upcoming US presidential election and the upcoming Brexit. In these conditions, gold remains the main asset for risk diversification.


Today the central event of the day will be the FOMC meeting. In addition, it is worth paying attention to the publication of the US retail sales report for August. Experts expect sales growth to slow down.


On the chart, the Tories are still moving within the horizontal channel formed between the levels of 1940.00-1967.00. As a priority, we consider the scenario with the price breaking the upper side of the flat.


· Resistance levels: 1967.00, 1993.00, 2030.00.


· Support levels: 1940.00, 1914.00, 1900.00.


The main scenario - a breakdown of resistance at 1.1967 and growth to 1993.00.


An alternative scenario - a consolidation in the range of 1940.00-19670.00.


The current fundamental outlook is moderately positive. We consider buying from the level of 1940.00.

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