Gold Price (XAU/USD), Silver Price (XAG/USD): Charts, Price and Analysis
- A slightly hawkish reassessment of Fed intentions weighs on gold and silver.
- The fear of the U.S. debt ceiling is growing.
A number of asset classes will remain on hold today in anticipation of the Federal Reserve’s (Fed) latest decision, which is expected at 7:00 pm on Wednesday. The market is expecting a 25-Basis point rate hike to 500-525 and has already fully priced it in. The press conference 30 minutes after the decision will be closely watched by the market for signs that the Federal Reserve is considering a break in the rate hike cycle. The market has recently priced in a slightly dovish outcome to tomorrow’s FOMC meeting, which has weighed on the near-term outlook for gold and silver. U.S. short-dated bond yields rose last week, supporting the U.S. dollar. The dollar has been under selling pressure for months but appears to have found support in the 100.50-101.00 range ahead of tomorrow’s session. The dollar continues its upward trend today, trading at levels last seen two weeks ago.
USD Index – daily chart
The CME Fed Funds Probability now shows a 97.4% chance of a 25-basis point rate hike on Wednesday night.
Against the backdrop of a slightly firmer U.S. dollar and suggestions that the Federal Reserve will not cut interest rates as quickly as previously thought, gold has come under pressure and is struggling to regain the $2,000/oz level. Marker. Near-term support starts around $1,970/oz. at $2,009/oz. the first resistance line. The short-term future of gold will be determined tomorrow by Fed Chairman Powell.
Gold price (XAU/USD) daily chart – May 2, 2023
Silver’s daily chart looks very similar to gold’s, with the precious metal currently stuck between $24.50 and $26.25. Monday’s “top” was quickly reversed, with weak market conditions likely behind the move. Support around the $25.50 level may soon come under pressure, as silver has seen a series of lower highs and lower lows recently. As with gold, Chairman Powell will determine the next move in silver prices.