Gold traders with a clear focus on the FED on Wednesday

September 16, 2020 11:00

Source: Economic Events September 16, 2020 - Admiral Markets' Forex Calendar

After the speech from FED chairman Powell in Jackson Hole on the 27th of August, where he brought up "average inflation targeting", meaning that the FED will allow inflation to run above the FED target rate of 2% for a period of time, Gold traders will be carefully watching the FED rate decision today.

While no changes in regard to rates should be expected, Gold traders, especially, will be scanning the FED's statement for any rhetorical hints of more or less monetary stimulus in the near term.

Our expectation is that the FED will likely sound as dovish as possible, especially after the Nasdaq100 saw its quickest 10% correction ever in the last weeks.

On the other hand, it may turn out otherwise. Here is what we are taking into account:

  • Today's FED rate decision is the last before the US presidential election
  • US President Trump has had a fair share of attacks on the FED over the last 3.5 years
  • It seems difficult to imagine an ultra-dovish rhetoric, which would potentially play into the hands of the incumbent president.

However, the FED is still, in theory, independent and the previous is purely speculative.

While we still consider the technical picture to be neutral between 1,865 and 2,075 USD, we remain slightly bullish in the near-term for the yellow metal with the focus being on the pre-weekly highs around 1,970 USD. A substantial break higher makes another attempt to recapture the 2,000 USD mark likely.

On the other hand, a break below 1,900 USD and a push down to 1,800 USD remains a serious option and shouldn't be ruled out, especially if the FED's rhetoric results in "disappointment" among Gold, and also bond, traders where a bullish spike in US yields could result in selling pressure in Gold, too:

Source: Admiral Markets MT5 with MT5SE Add-on Gold Daily chart (between May 06, 2019, to September 15, 2020). Accessed: September 15, 2020, at 10:00 PM GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2015, the value of Gold fell by 10.4%, in 2016 it increased by 8.1%, in 2017 it increased by 13.1%, in 2018, it fell by 1.6%, and in 2019, it increased by 18.9%, meaning that in five years, it was up by 28%.

Discover the world's #1 multi-asset platform

Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analyses is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures that refer to any past performance is not a reliable indicator of future results.
  6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
  7. Any kind of previous or modelled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
  9. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.
Admirals Eine Komplettlösung für das Bezahlen, Investieren und Verwalten Ihres Geldes

Admirals ist mehr als ein Broker. Wir sind der Dreh-und Angelpunkt für Ihre Finanzen, indem wir Ihnen eine breite Palette von Finanzprodukten und -dienstleistungen anbieten. Wir machen es möglich, persönliche Finanzen durch eine Komplettlösung für das Investieren, Ausgeben und Verwalten von Geld anzugehen.