© Dukascopy Bank SA
"Gold may drop in an initial reaction to a hike. But as the hike is generally expected, any selloff may be relatively short-lived."
- HSBC (based on CNBC)
Pair's Outlook
The bullion traded with no daily change on Tuesday, even though attempts were made to surge in the direction of 1,070. Wednesday morning, however, we are seeing a more pronounced bullish action. Market volatility is expected to be uplifted in the next 24 hours, also because traders are curious about the Fed decision and, most importantly, the future pace of hikes. Even a slightly dovish outcome for the second point could result in positive trading for gold, possibly up to the 1,086 mark (monthly PP). A hawkish result should prepare the metal for a sell-off down to the 1,044 target (2010 low).
Traders' Sentiment
Yesterday we saw the total number of bullish open positions remaining flat at 59%, putting the bears into minority of 41%. Any shift in sentiments among SWFX market participants is likely to occur after the FOMC interest rate decision is made this evening.
© Dukascopy Bank SA