Wednesday, March 21, 2018

Gold bounces back nearly $20 from yesterday's declines as markets await another expected rate hike from the Fed

For no particular reason yesterday, the dollar soared over 40 bps while gold fell to a three week low of around $1307.  However as the Fed prepares in a few hours to announce their next interest rate policy shift, not only has the dollar lost all of yesterday's gains, but gold has recovered all of its losses and is now well above even where it started at the beginning of Tuesday's market open.

Gold futures on Wednesday edged up from the three-week lows notched in the previous session, shaking off a firmer dollar ahead of a widely expected interest-rate hike by the Federal Reserve and potential clues on how aggressive the central bank panel will be with rates from here. 
Investors across financial markets have priced in expectations the Fed will raise its benchmark rate by a quarter-percentage point. Investors are watching for hints that new Fed Chairman Jerome Powell and team will signal four rate rises in 2018 rather than three as previously signaled. 
The rate announcement comes out at 2 p.m. Eastern, followed by Powell’s press conference at 2:30 p.m. -  Marketwatch

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