(Kitco News) – The gold community on X is buzzing as retail traders scramble to read the tea leaves and position themselves to profit from what promises to be a significant FOMC rate decision.
The central bank will issue its interest rate decision on Wednesday at 2 pm EST, and while analysts and traders are virtually unanimous in their belief that a rate cut is not on the table this month, there’s still potential for drama.
The Fed is due to share the first updated ‘dot plots’, or rate path projections, since the December meeting, and many market participants believe the latest FOMC voter data could suggest 50 rather than 75 bps of cuts this year. There’s also a possibility that the Fed pulls back from its implied easing bias and sets monetary policy on more neutral footing.
All this adds up to a great deal of potential volatility for gold bugs, as changes to the timing and scale of this year’s rate cuts will likely depress gold prices.
“#XAUUSD The sideways pressure on gold has exceeded 2162 and has not continued. At present, the gold price will most likely correct around 2150/2165. #FOMC #GOLD,” wrote X user Emiy_XAUUSD.
“There is a high probability that the Federal Reserve interest rate will bottom out and rise again in the early morning,” she added. “Therefore, if it does not fall below 2138 after the data is released, you can try to go long!”
In a follow-up post, she shared her assessment of the Fed’s potential impact on gold prices.
“At present, both the #Federal Reserve and the market are in a relatively entangled state,” she wrote. “The interest rate resolution and subsequent #Powell's speech focus on whether to cut interest rates 2 or 3 times this year! If interest rates are cut three times as previously expected and the rate cuts begin in May, then the U.S. index is expected to fall further and #gold prices may rise further; conversely, if interest rate cut expectations are lowered, then the recent rally is likely to officially end and gold prices fall below 2150- The 40 drop officially starts the callback.”
“#XAUUSD Trend line broken,” wrote DemetriusRO6.
“It might be fake, let's wait for retest and a close above 2168 for bulls, but I hold my sell.”
X user TradingDame said she’s spotted a peak in XAUUSD at $2,195.10 on the daily chart, “indicating expected declines to supports at 2144.34, 2087.89, 2057.40, and at least down to Major Support at 1984.20.”
X user HDcharting was keeping a close eye on the technical picture for the U.S. dollar.
“#USD ahead of #FOMC,” they wrote. “Another rejection this week?”
“Keeping an eye on that MACD.”
