NOUN: A figure of speech in which apparently contradictory terms appear in conjunction :If today’s headline seems like it conveys a theme of contradictory terms you are correct. It is almost a certainty that tomorrow the Federal Reserve will announce and implement a ¼% rate hike after taking its first-rate pause since it began a series of aggressive rate hikes in March 2022.
It is most likely that gold will trade in a narrow and defined range before the announcement of the Fed decision. However, many analysts are already assuming that the Federal Reserve is at the tail end of rate hikes based upon recent data supporting that they are coming closer to their 2% target. If that is the case, it would be highly supportive of gold pricing moving the precious yellow metal higher.
The takeaway, therefore, becomes not whether or not the Fed will raise rates by ¼%. But rather whether or not the statement released after the meeting as well as statements made by Chairman Powell at the press conference make any veiled reference that will give market participants insights as to their forward guidance.
In other words, if tomorrow’s rate hike is the last this year it is highly unlikely that he will clearly state that objective. At the same time, it is highly unlikely that he will give a timeline to the first-rate cuts that contain more than an open-ended and vague response.
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