Gold market is traded without significant changes after another FOMC rate-hike up to 2.25%.
Fed accepted the decision to raise the rate by changing its forecasts for economic growth for 2018 and 2019. Initially, this decision led to a sharp strengthening of the dollar, which resulted in gold falling to three-week lows, but the buyers managed to return the precious metal to the range in which the trades last several weeks.
The fact is that Fed retained its plans for the number of rate hikes for the current and next year, amid ongoing trade wars, as well as the appearance of signs of slowing inflation, some analysts believed that the regulator could take a pause in the normalization of rates. Fed is still planning to hold another rate hike in December this year, and also forecasts three more increases in 2019.
So far, the market's reaction to the results of the FOMC meeting is rather restrained, as all the decisions taken were broadly in line with the traders expectations. In general, the decision to raise rates and keep plans for further rate hiking are good support factors for the US currency in the medium and long term.
Gold will remain under rather strong pressure, as strengthening the dollar will make yellow metal more expensive. Secondly, the current policy of the Fed helps maintain the level of yield of US government bonds at a sufficiently high level, which makes gold less attractive for long-term investments.
Today we are most likely will see a very volatile day, because the economic calendar is scheduled a fairly large number of important news that can greatly impact the market. In US today, there is data on basic orders for durable goods, as well as data on estimating GDP growth for the second quarter. During the American session, the ECB head Mario Draghi and the head of the Federal Reserve, Jerome Powell, will speak publicly. So far the precious metal is surprisingly traded very firm and keeps a chance of maintaining the current side range of trades.