Gold maintained a bearish stance in yesterday's trading session, with market attention now turning to the upcoming FOMC meeting. Bloomberg Economics offers insights into the anticipated outcomes of this crucial event.
According to Bloomberg Economics, Chairman Powell is expected to adopt a more hawkish stance during the April 30-May 1 meeting. At the very least, he may signal that the median FOMC participant now foresees fewer rate cuts this year. In a more hawkish scenario, Powell might even suggest the possibility of no cuts at all—or potentially, the consideration of a rate hike, although this remains less likely as per the current baseline projections.
Signs of the post-meeting policy direction and Powell's stance were likely hinted at during his April 16 speech. In this address, the Fed chief hinted at the prospect of keeping rates higher for an extended period and maintaining a restrictive policy stance "as long as needed."
The US Dollar Index (DXY) continues to exhibit a bullish technical setup, underscoring the current market sentiment.
Entering a trend requires caution, and investors are advised to exercise prudence.
Regarding gold, the recent bearish rally suggests a need for patience and strategic planning. It's advisable to wait for consolidation in the market and set realistic trading goals. Sticking to pre-established trading plans and maintaining discipline in trade entries are essential. Focus on identifying the best setups and exercise patience while waiting for favorable trading opportunities amidst the evolving market dynamics.