Get started

FOMC

FOMC Rates Decision and the Effect on Gold**Repost from Dec 13th 2022 since the original post disappeared** Economic indicators from the past month indicate that the price of services is the key factor that helps prevent a rapid decline in inflation , although the price of goods had already dropped considerably and the labor market remained strong, showing no signs of slowing down the inflation rate. ECONOMICS:USCPMI In the graph above, one of the key economic indicators, the ISM Service Sector Index for the month of November, accelerated to 56.5, above the forecasted rate of 53.5 and the previous month's level of 54.4. Despite the rise in interest rates from the FED, the ISM indicated that the services sector is still going strong, correlating with the positive outcome in labor market data. FOMC Rates Decision 15 December 2022 Previous = 3.75-4.00% - Prediction from Bloomberg, OE, Forex Factory, Trading Economics = 4.25-4.50% Bloomberg, Oxford Economics, the Forex Factory, and Trading Economics predict that the Federal Reserve's interest rate will rise by 0.50%. The market forecast for the highest interest rate as of December 9, 2022 is 4.75-5.00% in May 2023, with a gradual decrease beginning in the third quarter of 2023. However, because the services sector has been performing well, the FED's interest rate cut may come later than expected by the market. Thus, from a fundamental standpoint, the USD is expected to continue appreciating, albeit not as strongly as in recent months. On the other hand, the gold price is expected to fall.
UShort
by ChartTrail
I Smell a Santa Claus RallyWith inflationary expectations low, a decrease in CPI and Core CPI, a likely slowing in interest rate hikes, there's too much positive news in the short term to ignore the likelihood of a near-term rally. Still, some hinges on Jerome Powell's outlook tomorrow, but I expect him to keep language as soft as his last speech. Last month, he was still very domineering in his tone on inflation, but the last FOMC meeting was much softer. I expect that again with inflation ticking down as proof of low inflationary expectations. I mean, you can hear people freaking out about the economy everywhere. I don't think inflationary expectations are high lol. Listen to his last speech and you can hear a dramatic tone shift. Here's last FOMC Press Meeting After rate hike in mid November: www.brookings.edu HARD LANGUAGE Here's his "Inflation and the Labor Market" speech on 11/30: www.youtube.com SOFT LANGUAGE Long term? You'll have to look at my first post to see that. Enjoy, and you can find a link to an Economic Release calendar down below for you to save. InTheMoney
TVC:NDQLong
by InTheMoneyAdam
5
$SPX 3 Day Chart 2008 GFC Crash OverlayHistory never repeats but sometimes rhymes right? 2008 MBS bubble dropped the S&P 500 56% from the ATH, assuming we have an everything bubble after 6+ Trillion QE injection since 2020, I see similarities to the Great Financial Crises. Powell made it very clear yesterday, more hikes for longer if inflation is not brought down to 2% target so how will they ever pivot without dropping inflation quickly? Inflation YOY around 7% "according to CPI" assures corporate earnings collapse going forward IMO, so I think the market is over priced Early Pivot or no Pivot. Laszlo, MMGinvest 12/15/2022
SP:SPX
by Laszlo-MMG
4
Bitcoin and 10k all but guaranteed?Looking at the Weekly Bitcoin chart. We've mapped out a key level that Bitcoin shattered down through with the FTX news, but has since failed to reclaim and break back through. FTX collapse aside though, we can see that this 18K level is where Bitcoin skyrocketed past in late 2020. Thanks to Uncle Sam's stimulus checks of course... Over the coming weeks, this 18K level will be a strong indicator if we'll see more pain ahead. Bitcoin wasn't able to hold the 18K level it blasted past this week. The 10-12K range seems to be calling Bitcoin's name at this point. Combine that with CPI, the FOMC/FED and Powell's stances, the bearish sentiment has no reason to go away. Inflation came in lower (despite still being at 7.1%), but as Powell stated, they'll be continuing to hike until their targeted 2% level is achieved. We'll look for nice trade setups on the way up or down. As you should be too. Eyes peeled out there. -TucciNomics Chief Overlord, AlgoBuddy
Short
by QuantVue
1
6 Reasons why the gold price will drop with interest rate hikes The FOMC announced another 50bps (0.50%) Interest Rate increase to 4.50% which has lead to short term downside for gold as an initial reaction. The question for many remains. Why does gold drop when interest rates rise? There are a number of reasons, but here are the top 5… #1: Investors look elsewhere Higher interest rates can make other investments, such as fixed investment assets and bonds, more attractive to investors. Gold investors will then sell their gold holdings and take advantage of higher interest rate yielding assets. This can lead to investors moving their money out of gold, which can lead to a drop in price. #2: Stronger U.S Dollar A higher U.S dollar can lead to gold being more expensive for investors who use other currencies to buy it. This can lead to a drop in demand for gold, which brings the price lower. #3: Higher borrowing costs When interest rates rise, this increases the costs of borrowing for business and consumers. They now need to pay more to borrow money to fund their operations. This can hamper the economic activity and drop the demand for buying stocks, precious metals and other investments. #4: Higher yields on gold-mining companies bonds Fixed investment gold bonds may seem more attractive than holding and investing in gold itself. This leads to a drop in gold mining stocks which essentially helps with the drop in gold. #5: More supply less demand With the factors I mentioned above, with investors leaving gold this increases the supply of the metal and decreases the demand. This leads to a drop in the gold price. #6: Uncertainty floods the markets When interest rates go up, this leads to uncertainty in financial markets (where gold is no exception). Investors feel the uncertainty and become worried for the economy. This can lead to a decrease in demand for gold and a drop in its price. These are all speculations in theory with why the gold price may drop with an increase in interest rates. We notice that the markets don’t always play according… Since the May 2022 Gold has moved in a sideways consolidation pattern. And this means, we can see the price continue in the range. Until we actually see a break up or down, the analysis in the medium term is sideways. We’ll be watching this carefully. Follow for more trading and fundamentals tips and analyses from the info I've learnt over the last 20 years as a trader. Trade well, live free. Timon MATI Trader Higher interest rates can also lead to higher yields on gold-mining companies' bonds, which can make these bonds more attractive to investors. This can lead to a decrease in demand for gold-mining stocks and a drop in the price of gold. Higher interest rates can also increase the opportunity cost of holding gold, as the metal does not generate any income or interest. This can make investors less likely to hold onto gold as a long-term investment. Gold is often seen as a hedge against inflation, and higher interest rates can signal that the central bank is trying to keep inflation in check. This can reduce the perceived need for gold as a hedge and lead to a drop in its price.
COMEX:GC1!Education
by Timonrosso
1
Gold : Xauusd Potential LongWe have series of higher highs and higher lows. Trendline (technicals) and fundaments support growth in Gold price. Then question is why gold fell down after FOMC. Powell speech give clarification of interest rate almost peaked ( he hinted 5 % max , depending on circumstances). I think its correction phase. Big boys Don't let u win so easily. Trendline support is at 1790-1792 area. Below that strong support at 1780-1782. These support are potential buying areas. Upside potential is 1827-1850 Medium Term. Good luck and DO comment on the idea and odds
FX:XAUUSDLong
by decentshaw
XAUUSD Potential for Bullish Continuation | 15th December 2022Looking at the H4 chart, my overall bias for XAUUSD is bullish due to the current price being above the Ichimoku cloud , indicating a bullish market. Price has tapped into my pullback buy limit entry at 1794.885, where the 61.8% Fibonacci line is. Stop loss will be at 1777.685, where the recent swing low is. Take profit will be at 1824.515, where the recent swing high is. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
OANDA:XAUUSDLong
by Rockqet
5 Reasons why Interest Rate hikes causes markets to fall - FOMC We had the CPI come our better than expected (7.1%) versus 7.3% expected. This means finally inflation is decelerating at an accelerating rate which is good for the markets. However, today with the FOMC they are expecting a 50 bps hike or 0.5% rise. Just a reminder in simple terms Interest rates is the amount of money (expressed as a %) that a lender charges a borrower for the use of their money. The interest rate is the percentage of the money you borrowed that you have to pay back as a fee. Now there are a few reasons why interest rate hikes can cause global markets to fall including. 1. Better places to invest in Investors take their money out of stocks and financial assets and into banks where the potential return is higher. 2. Strong economy When interest rates rise it tells is the economy is improving and getting stronger. This can lead to higher inflation expectations. 3. Expensive for businesses When interest rates rise, it makes the borrowing more expensive for businesses. This is based on the borrowing of buildings, assets and equipment. They now need to pay a higher rate to finance their debt. 4. Better for bonds and fixed investments Again, investors want a better ROI. They will take money out of the financial markets and more into bonds and other fixed-income investments. 5. Higher US Dollar Higher Interest rates often lead to a stronger dollar. U.S Exports become less competitive which hurts many multi-national companies. and less attractive for U.S stocks. Hope that helps. Save this so you have an idea on how Interest Rates move the markets. Follow for more daily tips. Thanks for the support. Trade well, live free. Timon MATI Trader
JSE:J200Education
by Timonrosso