Gold fell to $4,036 after the Fed meeting. The metal lost 0.76% for the day and broke a three-day winning streak. The regulator left the rate unchanged, but the option of raising it in December remained on the table.
What the designations mean. XAU/USD is the price of gold in dollars. PCE is the price index by which the Fed measures inflation. DXY is the dollar index against a basket of other currencies.
Why this matters to a trader. Today at 15:30 Moscow time, data is released that the December Fed decision depends on. Gold and the dollar react to it in the very first minutes.
What data is released at 15:30?
At 15:30 Moscow time, the US publishes two reports at once.
- PCE index - the Fed's main inflation benchmark when making rate decisions.
- First estimate of GDP for the third quarter - the market expects +3.2% year-on-year versus +2.2% a quarter earlier.
PCE is the inflation indicator that the Fed itself relies on. The release time of the reports is in the economic calendar.
Why is the door for a hike open?
At the October 28 meeting, the Fed kept the rate in the 3.75-4.00% range. But there was no unity in the committee.
- A 10-2 vote. Lisa Cook (member of the Board of Governors) and Beth Hammack (President of the Cleveland Fed) voted for a 25 basis point hike.
- The rhetoric of the Fed Chair. Kevin Warsh said that financial conditions are "tighter, but he is not ready to call them tight."
- A bet on data. Warsh added that before the next meeting the committee will receive "much more data."
Why does this pressure gold?
The market has already bought into December. According to CME FedWatch, traders are pricing in about 80% probability of a rate hike. The DXY dollar index is holding above 102.00.
Key point: gold pays no interest, and a rising rate makes the dollar more expensive. For the metal, this is direct pressure.
What are the levels and scenarios?
- Above $4,113 - the 20-day average, the next barrier is $4,229.
- If they are broken, the target nearby is $4,400.
- Below, the $3,998 zone and the previous support at $4,000-3,950.
- The relative strength index is around 38 - weak, but not yet reaching oversold.
From here, everything depends on the numbers.
- Scenario A. The data confirms the Fed's hawkish stance, and volatility in gold and the dollar intensifies in the first minutes after the release.
- Scenario B. The data comes in softer than expected, the market quickly reprices the December hike, the move is just as sharp, but now against the dollar.
If you trade gold on the news, check the conditions in advance and choose a challenge to suit your style.
Will you be sitting in gold at 15:30?
Half an hour around PCE on XAU/USD is tens of dollars of movement in minutes. Most traders plan to enter right there. The question is different: some prop programs explicitly prohibit holding a position during the data release window and close the account for one such trade, while others consider it normal trading. Even more important is how the daily drawdown is calculated: by a closed trade or by the intraday minimum. Before 15:30 there is time to verify this against the conditions, rather than finding out after the fact.