After a very quiet day of trading yesterday, gold is still finding resistance at the 38.2% retracement level and the upper boundary of the downtrend channel around 1630.
The focus of traders is now the FOMC meeting and a failure to announce any substantial new economic stimulus could see a severe sell off in gold. Alternatively, an announcement of another round of full-scale QE would most likely see a huge rally.
The most likely scenario is an extension to the Fed's bond buying programme aka Operation Twist, to which the reaction of the gold market will probably be muted and slightly disappointed.
We therefore expect another quiet day of trading today and tomorrow until the FOMC announcement at 5.30pm UK time.
The focus of traders is now the FOMC meeting and a failure to announce any substantial new economic stimulus could see a severe sell off in gold. Alternatively, an announcement of another round of full-scale QE would most likely see a huge rally.
The most likely scenario is an extension to the Fed's bond buying programme aka Operation Twist, to which the reaction of the gold market will probably be muted and slightly disappointed.
We therefore expect another quiet day of trading today and tomorrow until the FOMC announcement at 5.30pm UK time.