Developments in China could be the key to gold ahead of the FOMC
The price of gold recently rose to a 5-month high of $1800 and may continue to gain momentum in the near term. The ounce of gold is supported by the easing of health restrictions in China and the prospect of a slowdown in monetary tightening by the Fed.
The easing of health restrictions following major protests at the end of November is putting pressure on the dollar, while recent statements by some Fed members, including Jerome Powell, have reinforced the scenario of a slowdown in monetary policy tightening in December, putting pressure on bond yields.
Fed officials are now in a period of silence awaiting the next outcome of the FOMC meeting in mid-December, so markets’ attention should be primarily focused on upcoming inflation numbers and developments.
Further announcements to lift restrictions should support gold’s rise ahead of the December 13 US CPI.
Gold Price Daily Chart – Key Levels