A win-win situation for Gold in the Fed Minutes on Wednesday?
We want to have a look at Gold today, in the context of the release of the FOMC Minutes for the Fed's September meeting.
After Gold broke below 1,480 USD on Monday last week, and it closed above 1,500 USD after a series of bad US economic data releases last week. Namely, the ISM Manufacturing and ISM Non-Manufacturing index disappointed market participants and resulted in rising recession fears, while Friday's Non-Farm Payrolls came in mixed.
As a result, market participants started to expect the Fed to cut rates by another 25 basis points in October, currently showing a probability of over 80%.
With these developments in mind, Gold traders will closely watch the Fed Minutes and search for any signs of further monetary stimulus not only at the upcoming meeting, but also in December.
All in all, our outlook for Gold stays positive – also in the days, weeks and months to come.
That said, we still see our mid-term target around 1,650/700 USD being active and even if we see a stint below last week lows around 1,460 USD (e.g. based on a neutral interpretation of the statement or the Fed members clearly emphasizing that they consider only one 25 basis point in 2019 as necessary), a potential mid-term long trigger is still found around 1,440/450 USD.
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Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
After Gold broke below 1,480 USD on Monday last week, and it closed above 1,500 USD after a series of bad US economic data releases last week. Namely, the ISM Manufacturing and ISM Non-Manufacturing index disappointed market participants and resulted in rising recession fears, while Friday's Non-Farm Payrolls came in mixed.
As a result, market participants started to expect the Fed to cut rates by another 25 basis points in October, currently showing a probability of over 80%.
With these developments in mind, Gold traders will closely watch the Fed Minutes and search for any signs of further monetary stimulus not only at the upcoming meeting, but also in December.
All in all, our outlook for Gold stays positive – also in the days, weeks and months to come.
That said, we still see our mid-term target around 1,650/700 USD being active and even if we see a stint below last week lows around 1,460 USD (e.g. based on a neutral interpretation of the statement or the Fed members clearly emphasizing that they consider only one 25 basis point in 2019 as necessary), a potential mid-term long trigger is still found around 1,440/450 USD.
Ready to take your trading to the next level? Find out how in Admiral Markets’ new webinar series Trading Spotlight, where our trading experts will be discussing risk management, trading psychology, and their top strategies for trading the world’s most popular markets - admiralmarkets.com/education/webinars/trading-spotlight-1
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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