The gold price has surged pass the $1300 mark in today’s trading session and some say this week’s Interest rate decision from the US Federal Reserve and Brexit developments may determine if the price will stay above this critical level.
The Fed is expected to make no changes in rates this week when it delivers its interest rate this week which is 100 percent priced into the market so the following monetary statement will likely generate the most interest and could be the catalyst for another big move in gold.
Any signs that the Fed plan more rate hikes this year could see gold pressured while a dovish statement is likely to boost the price.
“The Fed has the potential to set the overall tone for commodities, as a dovish tilt could go a long way towards removing a considerable impediment to emerging market and speculative demand for commodities,” noted strategists from TD Securities
“In this week's FOMC meeting, the interest rate decision will be a snooze-fest, but the statement and press conference will likely be noteworthy.” They added.
Tomorrow the market will await the British parliaments decision regarding further steps they plan to take regarding Brexit and as the March deadline appears to reach a deal with the EU, tensions are building, and some say time is running out and the UK may end up crashing out of the EU.
If this theory gathers steam as we head into tomorrow’s meeting gold may receive a boost as a safe haven
“Global markets will face several key events in the few sessions ahead that could potentially be crucial towards price discovery. Continued Brexit drama, economic data and an eventful week for U.S. earnings season will be the main focuses in this busy week. At the same time, we anticipate that statements from the higher-level trade meetings could also provide a major catalyst for commodity prices.” Added the analysts
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