Gold: the fed can push rates even lower
Gold prices declined for the fifth day in a row, but have not played one-day rally, which occurred a week ago. Metal flirts with the marker 1222 is expected which will open the way to 1220 and below. While short-term downside risks for gold are present, the potential for further declines is limited.
The dollar returns confidence. He rises against major rivals after the recent “bloodshed” as an initial response to the outcome of the midterm elections in the U.S., which predictably ended in a “hung” Congress. And along with the noted correction in the USD and risk appetite, which has a double pressure on the precious metal.
In the short term, this pressure may increase in the context of the U.S. Federal reserve meeting. Tonight the regulator will announce its decision on monetary policy, and while nobody’s expecting surprises (the fourth in this year’s increase is expected next month), potentially positive rhetoric, the Bank is able to maintain a demand for depreciating the dollar.
In this case, the liquidation of long positions on gold can be developed, but much below the 1220 quotes is unlikely, because a significant rally from the USD is not expected. Key support in the area 1214.
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