How to trade Gold on FOMC Rate Decision Today?

Posted Wednesday, May 1, 2019 by
Arslan Butt • 1 min read

On Wednesday, gold prices slid to $1,281 level giving up overnight gains due to the bullish US equities. The May Day lull is seizing most European markets ahead of a closely monitored Federal Reserve decision on the outlook for US interest rates.

Fed Monetary Policy
The US Federal Reserve is widely anticipated to keep interest rates on hold at 2.50%. However, the press conference will leave its marks on the dollar. Reporters will likely ask Fed Chair Jerome Powell about the next move in rates, and his answer will garner a lot of attention.

Fed “No Rate Hike” – “Priced In”
Since we all know the Fed is widely expected to keep the interest rates on hold, and most of the investors have already priced in no rate hike sentiment, keeping the dollar supported. Diminished demand for the dollar is keeping dollar bearish and supporting the gold prices. So any change in the FOMC rate or policy stance can trigger massive volatility in the market.

Hawkish FOMC – The discussion about increasing the interest rate could trigger a bullish trend in the US dollar, and we will see a sharp sell-off in gold.

Dovish FOMC – Conversely, discussions about cutting the rate can trigger further buying in gold today.

GOLD // XAUUSD – Trading Plan

I will be waiting for Gold to come down near $1,276 to take buy entry. My first target is $1,287. While $1,287 seems to be an excellent level for selling.

Good luck!

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