Gold Slips to $1,635 ahead of US FOMC and Fed Rate Decision

The gold price is reeling from seven months of losses in a row, the longest streak of drops in more than five decades. And this comes as the

Skerdian Meta•Tuesday, November 1, 2022•1 min read

Gold Slips to $1,635 ahead of US FOMC and Fed Rate Decision

The gold price is reeling from seven months of losses in a row, the longest streak of drops in more than five decades. And this comes as the Federal Reserve prepares to announce its fourth consecutive 75-basis-point rate hike.

Spot gold is expected to end October down 1.4% on the month, marking the seventh monthly fall in a row, a record since 1968. GOLD is down roughly 10% year to date. Gold has plummeted more than 15% since the end of March.

Gold has failed to maintain new gains since hitting above $2,000 per ounce in March following Russia’s invasion of Ukraine. It has primarily traded in a downtrend, weighed down by a strong US dollar and increasing Treasury yields.

XAU/USD

While many continue to speculate about a Fed pivot or, at the at least, a slowdown in the coming months, the US central bank is still on track for another hefty rate hike on Wednesday.

According to Goldman Sachs’ most recent note, the Fed will raise interest rates to 5%, which is higher than the bank’s previous projection.

The Fed forecasted 4.4% growth this year and 4.6% growth next year at its most recent meeting. The Fed would have lifted rates by 375 basis points after this week’s meeting, bringing the federal funds rate to 3.75%-4%.

Gold Technical Outlook

The gold price has a positive bias today, influenced by stochastic positivity, while the EMA 50 continues to exert negative pressure on the price. It’s keeping the bearish trend scenario legitimate and active, with a primary target of $1,615.

It is vital to keep the price below $1,660 to maintain the predicted decrease, as breaking it will cause the price to return to the corrections bullish track and achieve gains around $1,686.

Today’s trading range is likely to be between $1,615 support and $1,655 resistance.

Today’s projected trend: Bearish

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.