Gold Slightly Higher as FOMC Awaited
Gold prices moved slightly higher on Monday as investors awaited the FOMC meeting announcement set for Wednesday. Gold has seen some physical buyers enter the market at current price levels, and some shorts have elected to cover positions ahead of what is a relatively busy week from a data standpoint.
Although the FOMC announcement and press conference will likely be the data highlight of the week, investors will get lots of other things to chew on. PPI, CPI, weekly jobless claims, housing data and more are due out this week. The Fed is not expected to do anything different at this week's meeting. Investors will, however, closely examine the Fed's comments on the economy and outlook. In addition, Fed Chairwoman Janet Yellen's comments following the decision announcement will be closely scrutinized as well. Markets are looking for more clarity as to the Fed's rate-hike plans. Many believe that the first hike will be seen sometime during the middle of next year. Others feel that a rate hike could potentially come even sooner. If the Fed's comments appear to be more dovish, gold could potentially see more buyers come in at current levels. On the other hand, if the Fed takes more of a hawkish tone in their comments then gold may see additional selling pressure.
Gold has broken some decent support levels and may be headed for a test of the $1200 level. A breach below this level could potentially set the stage for another significant leg lower in gold prices. Gold will likely continue to take its cues from the dollar index and equity markets. Both have been moving higher and pressuring the yellow metal in the process.
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16 Sep 2014 | Categories: Gold