Yesterday's FOMC meeting showed the FED keeping interest rates on hold for a longer period. This means the FED is not expected to lower interest rates "totally" next year. At the same time causing "demand" for the US dollar to be seen as strong. However, we expect the FED to raise interest rates by "25 bps" for the end of 2023 at the FOMC meeting on November 1 or December 13 this year.
Gold vs US Dollar (DXY)
The result of the FOMC decision yesterday clearly gave a "Hawkish" sentiment towards the dollar. The "treasury yield" market index is seen to rise and put pressure on the "non-bond yield" market such as the commodity and stock market.
The fall in the price of gold yesterday was seen to stop for a moment at the beginning of today's Asian session. This is due to investors' concerns about the increase in inflation since the beginning of September. The link between crude oil prices and inflation cannot be denied. This is because "crude oil" is the "leader" for all world commodity markets. The increase in the price of crude oil can put inflationary pressure on countries and can also affect the increase in the price of world commodities such as food, iron, gold and others.
We have expected OUTLOOK First Week Edition September 2023) that the increase in oil prices will continue until at least $100 per barrel. This can give a "boost" to the demand for the Gold market. However, the results of the FOMC meeting yesterday temporarily stopped the bullish sentiment towards the gold market. However, whether the drop in gold prices since yesterday is temporary or long-lasting will be determined by some economic data that will be published this week.
Thursday, September 21
U.S. Current Account (Q2 2023)
Philadelphia Fed Manufacturing Index (Sep) – Gold Market Focus
CB Leading Economic Index (Aug)
Existing Home Sales (August)
Friday, September 22
S&P Global Composite PMI – Flash Estimate (Sep) – Gold Market Focus
TECHNICAL ANALYSIS
$1920 is seen to be the determining factor for the price of gold, if this price level is successfully broken $1900 will be taken in line with the increase in "Open Interest" in the "Gold Futures" market which is seen to increase by 10,000 this week. But if otherwise $1940 and then $1950 will be reached.
