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Bullion Range Trading Ahead Of Fed Decision

GOLD

Gold has been trading in a narrow range during the APAC session ahead of the Fed announcement later today. A 25bp rate hike is widely expected but the tone of the comments will be important and a hawkish note is likely to be detrimental to bullion. Gold prices are down 0.1% today to around $1926.40/oz after rising 0.3% on Tuesday following softer US data. DXY is flat on the session.

  • Gold continues to trade between resistance at $1949.20, the January 26 high, and support at $1899.50, the 20-day EMA. But trend conditions remain bullish.
  • The World Gold Council reported that demand for gold rose around 20% in 2022 to its highest since 2011 driven by precautionary flows due to rising inflation. Central bank purchases were their highest in over 50 years but jewellery demand was down slightly. The Council sees upside demand potential in 2023 because of recessionary and geopolitical fears and the recovery in China should drive increased demand for jewellery.
  • Later the Fed meets and is expected to hike rates 25bp (see MNI Fed Preview). There are also manufacturing PMIs/ISM for January for the US and Europe and US JOLTS job openings for December.
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