The FOMC minutes confirmed that the Fed is on track to hike rates again at the December meeting. How do precious metals trade these days? Let's find out with this 12 October XAUUSD Technical Analysis and XAGUSD Analysis from HotForex.
12 October, HotForex - FOMC minutes showed “many” saw another rate hike was warranted, while a smaller number (probably Kashkari, Evans, and Kaplan) thought action could wait. Several thoughts that further tightening should hinge on incoming data, though it was acknowledged that Hurricanes Harvey, Irma, and Maria would impact economic activity.
There was active debate over inflation and wages. While many saw some of the softening in inflation as due to idiosyncratic factors, other factors could be at work too and there was concern that such influences could be more persistent. Also, “several expressed concern that the persistence of low rates of inflation might imply that the underlying trend was running below 2%.”
Main Macro 12 October Market moving fundamental events analysis
- EU Industrial Production – Expectations – 0.5% m/m from 0.1% seen in August.
- US Jobless Claims & PPI – Expectations – September PPI is forecast to rise 0.4% vs 0.2% in August, while rising 0.2% core and 2.1% core y/y. Also due then is recently choppy initial jobless claims, seen dropping another 22k to 238k as storm anomalies wash out of the data.
- ECB speeches – ECB President Draghi and ECB’s Praet speak in Washington and New York respectively.
- FOMC Speeches – Governor Powell addresses “Prospects for Emerging Market Economies in a Normalizing Global Economy” from 10:30 ET and Governor Brainard takes part in a monetary policy panel at the Peterson Institute from 10:30 ET.
12 October XAUUSD Technical Analysis
The Greenback has continued its decline this week and the main beneficiaries have been the key commodities of Gold and Silver. Last night’s FOMC minutes added to the negative sentiment for the USD this week. The Doves on the committee were suggesting that weak inflation may not be transitory and caution in raising rates.
However, the December rate hike is now “baked in” to expectations and only a significant weakening of the data stream and some major shocks from the current Earnings round would be required to stall the move. GOLD and Silver both triggered LONG positions on the DAILY timeframe on Monday and Gold hit T1 yesterday for a net gain of $10.40 or 1040 pips.
This article about 12 October XAUUSD Technical Analysis was written by Stuart Cowell, Market Analyst at HotForex. The provided article is a general marketing communication for information purposes only. It does not constitute an independent investment research. Nothing in this communication contains an investment advice or an investment recommendation. It also does not contain a solicitation for the purpose of buying or selling of any financial instrument.
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