Gold intermarket: Gold is telling us story about the Fed and DXY

Gold is telling. Gold is rallying after an initial offer on a less dovish FOMC this time around, but the price turned around and has continued to rally while the US dollar has taken a plunge as markets start to figure that there will not be a rate hike in September after all.

Despite the Fed suggesting that the economy is moderating and how global risks are diminished, markets are reading between the lines and suspect that there are still too many risks to a fragile US economy and that the statement wasn't hawkish enough to make for a rate hike before the elections in the US. Gold is of course better bid on the back of such skepticism and will rally on a weak US dollar. The DXY has nose dived to 96.80 while US30 year yields have also dropped to 2.23 and USD/JPY fails to maintain the bid on the 106 handle, down to 104.68. Stocks and gold are up because the Fed is not convincing. 

You can read more here on the Fed and the potential for higher gold in Macro Scan and from today's pre-Fed analysis that has reported on such outcomes.

FOMC today, BoJ tomorrow: The Fed's mantra unveiled