Just Off Wednesday’s Lows As Dollar Resumes Ascent

Gold deals ~$14/oz softer to print ~$1,659/oz, more than unwinding the ~$9/oz higher close on Wednesday, operating a little above its post-FOMC lows as the USD (DXY) has recorded fresh cycle highs while nominal U.S. Tsy yields have pushed higher in Asia.

• To recap, gold whipped from fresh two-year lows ($1,654.0) to session highs ($1,688.0) in the wake of the Fed’s policy decision, briefly breaking out of its pre-FOMC trading range (between $1,660-1,680) in the process.
• While the Fed raised rates by 75bp as widely expected, focus for gold has been on the Dot Plot, with a revision to the latter building on the “higher for longer” narrative re: rates.
• Elsewhere, the rise in tensions between Russia and the west continues to spur little by way of haven demand for gold, with this week’s crowded slate of central bank action likely taking precedence.
• From a technical perspective, gold remains in a clear downtrend. Initial support is seen at $1,640.9 (Aug 8 2020 low), with a breach of that level exposing further support at $1,610.5 (1.00 proj of the Jun13-Jul21-Aug10 swing), while initial resistance is seen at $1,688.9 (Sep 1 low).