Gold price awaits make or break Fed rate decision

Washington (Dec 16)  The size of the liftoff and the policy tightening path are the major points the metal traders would watch out for. The markets expect the Fed to hike rates 25bps and point to a painfully slow path of tightening. Given the markets have priced-in a major part of the first move, the metal may be in for a bout of profit taking on shorts ahead of the weekend.

However, prices may take a hit if the 25 basis point hike is accompanied by a slightly less dovish “Dot chart”. Furthermore, there are economic projections that would also influence the market expectations regarding the future rate hike path. Consequently, the prices are dead flat as there are too many things to watch out for in the FOMC event.

Gold Technical Levels

At USD 1064.77/Oz, the immediate resistance is seen at 1070.35 (10-DMA), above which the gains could be extended to 1080.48 (23.6% of Oct high-Dec low). On the other hand, a break below 1058.41 (previous day’s low) would expose 1050.50 (Dec 2 low).

Source: FXstreet