Gold Prices and US Dollar’s Outlook Hinge on Powell’s Guidance

JULY FOMC MEETING KEY POINTS: The Fed is expected to raise interest rates by 25 basis points to 5.25%-5.50% With a quarter-point hike fully priced in, attention should be on the tightening roadmap Powell is likely to offer guidance on the polity outlook during his press conference Recommended by Diego Colman Get Your Free Gold

کد خبر : 379580
تاریخ انتشار : سه شنبه ۳ مرداد ۱۴۰۲ - ۲۱:۰۰
Gold Prices and US Dollar’s Outlook Hinge on Powell’s Guidance


JULY FOMC MEETING KEY POINTS:

  • The Fed is expected to raise interest rates by 25 basis points to 5.25%-5.50%
  • With a quarter-point hike fully priced in, attention should be on the tightening roadmap
  • Powell is likely to offer guidance on the polity outlook during his press conference

Recommended by Diego Colman

Get Your Free Gold Forecast

Most Read: Canadian Dollar Forecast – USD/CAD in Consolidation Triangle Ahead of Fed Decision

The Federal Reserve will conclude its July monetary policy meeting on Wednesday afternoon. Wall Street expects the FOMC to resume its hiking campaign after a one-month hiatus, raising its benchmark rate by 25 basis points to a range of 5.25% to 5.50%, the highest band since 2001. This move is fully priced in, so it would not be a strong source of volatility in and of itself. For this reason, policy guidance should be the primary focus for traders and investors alike.

No summary of economic projections will be provided this time, but Jerome Powell will, as usual, hold a press conference following the announcement of the central bank’s decision. Although the weaker-than-expected U.S. CPI report for June argues for a less aggressive position, the Fed chair may be inclined to offer a hawkish message to prevent financial conditions from easing too much and to maintain optionality in case inflation picks up in the coming months, when base effects drop out of annual data.

If Powell indicates that more work is needed to restore price stability and signals another hike is coming, expectations for the Fed’s terminal rate will drifter higher, boosting Treasury yields, especially those at the front end of the curve. According to the futures market data, bearish positions against the U.S. dollar have reached extreme levels in recent weeks, so many speculators may be caught wrong-footed and forced to cover their trade at a loss in case of a hawkish outcome, sparking a short squeeze.

A short squeeze could trigger a strong rally in the U.S. dollar, which would have a negative impact on precious metals. This could mean some losses for gold (XAU/USD) and silver (XAG/USD) in the short term, but would not necessarily translate into a major sell-off in the space, because even if policymakers hike further, the normalization cycle is undoubtedly almost over as things stand today.

Although less likely, traders should also consider a scenario in which Powell abandons his hawkish rhetoric and embraces a softer tone. If the FOMC chief sounds non-committal about more tightening and hints at a strong data-dependence approach going forward, markets may attempt to front-run the subsequent easing cycle, leading to U.S. weakness. This would be positive for both gold and silver.

Recommended by Diego Colman

Get Your Free USD Forecast

UPCOMING FED DECISION

Source: DailyFX Economic Calendar

Trade Smarter – Sign up for the DailyFX Newsletter

Receive timely and compelling market commentary from the DailyFX team

Subscribe to Newsletter





لینک منبع : هوشمند نیوز

آموزش مجازی مدیریت عالی حرفه ای کسب و کار Post DBA
+ مدرک معتبر قابل ترجمه رسمی با مهر دادگستری و وزارت امور خارجه
آموزش مجازی مدیریت عالی و حرفه ای کسب و کار DBA
+ مدرک معتبر قابل ترجمه رسمی با مهر دادگستری و وزارت امور خارجه
آموزش مجازی مدیریت کسب و کار MBA
+ مدرک معتبر قابل ترجمه رسمی با مهر دادگستری و وزارت امور خارجه
ای کافی شاپ
مدیریت حرفه ای کافی شاپ
خبره
حقوقدان خبره
و حرفه ای
سرآشپز حرفه ای
آموزش مجازی تعمیرات موبایل
آموزش مجازی ICDL مهارت های رایانه کار درجه یک و دو
آموزش مجازی کارشناس معاملات املاک_ مشاور املاک

برچسب ها : ، ، ، ، ، ،

ارسال نظر شما
مجموع نظرات : 0 در انتظار بررسی : 0 انتشار یافته : ۰
  • نظرات ارسال شده توسط شما، پس از تایید توسط مدیران سایت منتشر خواهد شد.
  • نظراتی که حاوی تهمت یا افترا باشد منتشر نخواهد شد.
  • نظراتی که به غیر از زبان فارسی یا غیر مرتبط با خبر باشد منتشر نخواهد شد.