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18 Mar 2015
Gold inches higher as the Fed anticipates slower rate hikes
FXStreet (Mumbai) - Gold prices shot higher to USD 1165/Oz levels as the Federal Reserve policymakers anticipate a slower rate hike, while sounding slightly bearish on the US economy.
Gold gains as rate hike bets fall
The 2-year yield, which mimics short-term interest rate expectations fell sharply to 0.601%; down 6.1 basis points after the Fed policy statement dropped the word “patient” from its forward guidance, while stating that rate guidance does not mean the bank has decided on the timing of interest rate hike. The Fed also revised its 2015 GDP forecast lower to 2.3%-2.7% from the earlier forecast of 2.6%-3.00%.
However, Gold prices found strong support from the fact that the Fed lowered the 2015 end rate projection 0.625% vs 1.125% in December, which indicates tightening would be slower than expected.
Gold Technical Levels
The immediate resistance is seen at 1175 (5-WMA), above which gains could be extended to 1190.00 levels. On the flip side, support is seen at 1157 (5-DMA) and 1142.8 levels.
Gold gains as rate hike bets fall
The 2-year yield, which mimics short-term interest rate expectations fell sharply to 0.601%; down 6.1 basis points after the Fed policy statement dropped the word “patient” from its forward guidance, while stating that rate guidance does not mean the bank has decided on the timing of interest rate hike. The Fed also revised its 2015 GDP forecast lower to 2.3%-2.7% from the earlier forecast of 2.6%-3.00%.
However, Gold prices found strong support from the fact that the Fed lowered the 2015 end rate projection 0.625% vs 1.125% in December, which indicates tightening would be slower than expected.
Gold Technical Levels
The immediate resistance is seen at 1175 (5-WMA), above which gains could be extended to 1190.00 levels. On the flip side, support is seen at 1157 (5-DMA) and 1142.8 levels.