Opinion with Peter Hug
Traders Await Signal From The Fed
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
(Kitco News) - Traders await today’s FOMC announcement on interest rates. It is expected that the Fed will remain on hold, at this meeting, but again the language will be scrutinized for clues on whether the Fed is still anticipating another two hikes this year. The language may be more dovish than expected given the growing threat of an escalation of a trade war between the U.S. and China. There appears to be good demand just under the $1,218 level, where we have seen three probes by the bears. The market is overdue for a corrective bounce, possibly to the resistance level around $1,237. Should the Fed express a more hawkish tone, we expect a test to the $1,212 level, where we would take a shot looking for a rebound back to $1,220 as a first target. The downside for gold at these levels suggests a 5% risk. With the market shorts approaching extreme levels, it will not take much for a material rally to occur.