Gold is still stable today, waiting for the uptrend

Gold edged up modestly in US Tuesday afternoon trade, as the US Federal Reserve kicked off its two-day policy-setting meeting.

As usual, markets will be scrutinizing the FOMC statement and Fed Chair Powell's remarks at his press conference for clues about the trajectory of the Fed's monetary policy in the coming months.

Key external markets saw the US dollar index almost steady. Meanwhile, Nymex crude oil prices are higher and trading around 79.75 USD/barrel. The yield on the benchmark 10-year US Treasury note is currently at 3.894%.

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Nicky Shiels, metals strategist at MKS PAMP, said she sees potential in gold because of the Fed's inability to support the dollar's monetary policy.

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However, if the price falls back below the 50-day moving average around $1,947 per ounce, bears could target $1,940 and $1,932 an ounce.

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Many analysts also recommend investors ignore the short-term volatility of gold and focus on the limit scene. While usage has fallen sharply from a 40-year high on record in several years, the Fed is unlikely to bring it back to the 2% standard. Experts emphasized that gold is still an attractive delay prevention tool.

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However, the scarcity of supply could push commodity prices higher and the Fed is unlikely to achieve its target of bringing inflation to 2%.

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In an interview with Kitco News, Steve Land, portfolio manager at Franklin Templeton's Franklin Gold and Precious Metals Fund, said renewed investor demand was key to gold pushing back against record highs across the world. $2,000/ounce.

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The US dollar and US Treasury yields rose to two-week highs, making bullion more expensive for buyers currently holding other currencies.

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After Wednesday's widely anticipated 25 basis point hike, there's about a 60 percent chance the Fed will keep rates unchanged through 2024, according to the CME FedWatch tool.

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Euro-denominated gold hit a one-month high earlier in the session on hopes that economic stimulus from top Chinese bullion buyers could boost demand.

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Gold consumption by key buyers grew 16% year-on-year in the first half of 2023, with jewelry consumption up nearly 15%.

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Tim Waterer, head of market analysis at KCM Trade, said: “If Chairman Powell suggests that interest rates may have peaked, this would signal good news for prices. Gold has rallied in recent weeks.”