I suspect we'll see gold stay in roughly in this range (1490-1520) and above the green trend line until the Fed announces what it's doing with interest rates Tuesday or Wednesday next week.
The market has already priced in a .25% rate cut, with the expectation of one more rate cut later this year. Anything short of those expectations will be bearish for gold. For instance, if the Fed cuts rates but signals that there will be no more rate cuts this year, gold will sell off. As long as we get at least what the market expects, gold should see another rally to at least its highs from earlier this month.
Meanwhile, Trump is pressuring the Fed to cut rates to less than zero. If the Fed were to give in even a little bit to that presidential pressure-- say, by making a half percent cut rather than a quarter percent-- gold could go to the moon. Due to recession fears and Trump's agitation for rate cuts, some analysts have predicted that gold will hit $2000 per ounce next year.
Personally, I think it's unlikely that Powell will cave to Trump, and it's even likely that we won't get a clear signal about another rate cut this year. That would mean a sell-off for gold, at least in the short term.
The market has already priced in a .25% rate cut, with the expectation of one more rate cut later this year. Anything short of those expectations will be bearish for gold. For instance, if the Fed cuts rates but signals that there will be no more rate cuts this year, gold will sell off. As long as we get at least what the market expects, gold should see another rally to at least its highs from earlier this month.
Meanwhile, Trump is pressuring the Fed to cut rates to less than zero. If the Fed were to give in even a little bit to that presidential pressure-- say, by making a half percent cut rather than a quarter percent-- gold could go to the moon. Due to recession fears and Trump's agitation for rate cuts, some analysts have predicted that gold will hit $2000 per ounce next year.
Personally, I think it's unlikely that Powell will cave to Trump, and it's even likely that we won't get a clear signal about another rate cut this year. That would mean a sell-off for gold, at least in the short term.
