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Gold is trading very volatile as the focus is upon FOMC meeting

Sep 25 2018, 01:59 PM (+06) | Fortfs.com

Gold Monday session was very volatile, but the final price changes opening were minimal in relation to opening levels.

At the beginning of the trading day, gold, gradually regaining the status of safe-haven, received support from reports that China refused to hold scheduled negotiations with the US to resolve the trade conflict. Both sides do not yet wish to make concessions, which minimizes the expectations of an early resolution of this trade conflict.

However, with the beginning of the US trading session, USD dollar began to strengthen quite actively, having played almost all losses in the first half of the day, which put pressure on gold. Before the two-day FOMC meeting which begins today, the impact of the dollar on the yellow metal will significantly increase, as Fed's further decisions will largely depend on the vector of the movement on the dollar index, as well as the dynamics of the yield level of US Treasury bonds.

Before such an important event, investors are likely to refrain from very active movements in the market. The latest published report on inflation showed a slowdown in consumer price growth in the US, which some experts believe could lead to a slowdown in the rate of normalization of interest rates in the United States. Therefore, the final press conference of the Federal Reserve may present significant surprises.

Among the economic statistics today is worth highlighting the data on the consumer confidence index CB. Experts expect a decline in the index from 133.4 to 132.2 points, which, if confirmed, could exert moderate pressure on the dollar during the American trading session. Therefore, in general, gold today retains the chances of further moderate recovery.

Yesterday session did not make significant adjustments to the alignment of forces on the daily chart for gold, since price action is still taking place in a very limited price channel with the borders of 1192.00-1211.00.

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