Gold futures were unchanged on Wednesday despite a weaker US dollar as investors awaited the outcome of the Federal Reserve policy meeting for details of the US central bank’s plans to balance. interest rates with your inflation target.
At 09:51 GMT, December Comex gold is trading at $ 1966.80, up $ 0.60 or + 0.03%.
Most of the major gold players are on the sidelines due to uncertainty ahead of the Fed’s announcements. These traders expect more clarity on what monetary tools the Fed is expected to use to support inflation above 2%. The Fed’s decision expires at 18:00 GMT, followed by a press conference from Chairman Jerome Powell 30 minutes later.
Last month, the United States central bank took a more accommodative approach to inflation and pledged to keep interest rates low for longer.
“Markets will want to see if the Fed will change its language as some expect, perhaps something to the effect that it will keep rates low for a period of time (say three years) or perhaps do the same with its inflationary language,” he said Edward Meir, an analyst at ED&F Man Capital Markets, in a note.
“But we doubt that the Fed will lock in such fixed language before a possible turn in the US economy.”
Better Than Expected US Economic Data
The Federal Reserve reported Tuesday that US industrial production rose 0.4 percent in August, its fourth consecutive monthly increase, but gains have stalled since June. The Empire State Manufacturing Index, a monthly survey of manufacturers in New York State by the Federal Reserve Bank of New York, confirmed that business activity expanded at a solid rate in September.
On the other hand, US import prices rose more than expected for the same month, supporting the view that inflationary pressures were building.
On Wednesday, investors have a chance to react to a host of US economic data, including retail sales, business inventories and the NAHB Housing Market Index.
Basic Retail Sales is expected to reach 1.0%, slightly below the 1.9% previously reported and Retail Sales is expected to show a jump of 1.1%, less than 1.2% last month.
Daily forecast
The Federal Reserve is expected to conclude its latest policy meeting on Wednesday with somewhat more optimistic economic forecasts, but a renewed commitment to keeping interest rates low while the world’s largest economy needs to recover from its deepest slide in decades.
However, there is still room for surprises on Wednesday, including the possibility of the Fed providing more formal guidance on interest rates, or an increase in bond purchases that would signal a stronger focus on economic stimulus.
Gold could rebound if the Fed mentions those two policies, as both would be moderate moves.
To see all of today’s economic events, see our economic calendar.
