A win-win situation for Gold in the Fed Minutes on Wednesday?

October 9, 2019

By Admiral Markets

Source: Economic Events October 9, 2019 – Admiral Markets’ Forex Calendar

We want to have a look at Gold today, in the context of the release of the FOMC Minutes for the Fed’s September meeting.

After Gold broke below 1,480 USD on Monday last week, and it closed above 1,500 USD after a series of bad US economic data releases last week. Namely, the ISM Manufacturing and ISM Non-Manufacturing index disappointed market participants and resulted in rising recession fears, while Friday’s Non-Farm Payrolls came in mixed.

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As a result, market participants started to expect the Fed to cut rates by another 25 basis points in October, currently showing a probability of over 80%.

With these developments in mind, Gold traders will closely watch the Fed Minutes and search for any signs of further monetary stimulus not only at the upcoming meeting, but also in December.

All in all, our outlook for Gold stays positive – also in the days, weeks and months to come.

That said, we still see our mid-term target around 1,650/700 USD being active and even if we see a stint below last week lows around 1,460 USD (e.g. based on a neutral interpretation of the statement or the Fed members clearly emphasizing that they consider only one 25 basis point in 2019 as necessary), a potential mid-term long trigger is still found around 1,440/450 USD:

Source: Admiral Markets MT5 with MT5-SE Add-on Gold Daily chart (between July 10, 2018, to October 8, 2019). Accessed: October 8, 2019, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2014, the value of Gold fell by 1.7%, in 2015, it fell by 10.4%, in 2016, it increased by 8.1%, in 2017, it increased by 13.1%, in 2018, it fell by 1.6%, meaning that after five years, it was up by 6.4%.

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