Market Overview

Gold Consolidation Continues Ahead Of Fed Meeting

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Gold Consolidation Continues Ahead Of Fed Meeting

At 2 p.m. ET, the Federal Reserve is set to release its decision following this month’s meeting, but the market doesn’t seem to be expecting much.

“In another era, there would be massive pressure on the FOMC to raise rates but no-one expects anything from today’s meeting,” Societe Generale analyst Kit Juckes explained. “Still, some acknowledgement of the improved economic backdrop is likely in the statement and the market will go on slowly raising the odds of a 2016 rate hike.”

Related Link: Oil & Stocks Have Decoupled, But Daily Returns Remain Correlated

Since breaking out to new highs in late June, the SPDR Gold Trust (ETF) (NYSE: GLD) has been drifting downward throughout the month of July. Since July 1, GLD is now down 1.4 percent, while the SPDR S&P 500 ETF Trust (NYSE: SPY) is up 2.9 percent.

GLD’s trading range has been particularly narrow over the last 10 sessions, having not traded higher than $127.50 or lower than $125.11 during that stretch.

GLD investors are hoping that the Fed’s policy announcement will be the catalyst that will propel GLD out of its consolidation phase and into the next leg up of its rally. GLD is up more than 25 percent-plus since December when the ETF found support at the $100 level.

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Disclosure: The author holds no position in the stocks mentioned.

Posted-In: Analyst Color News Technicals Commodities Events Top Stories Economics Federal Reserve Best of Benzinga

 

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