The USD has weakened modestly against gold, sending gold price higher towards the 1968.50 mark after the FOMC left the key Federal Funds rate unchanged at the 0.25% maximum rate a few minutes ago. In the accompanying statement, the Fed has said that it will be ready to deploy more tools if needed, a dovish stance which does not rule out measures such as yield curve control and introduction of average inflation targeting (AIT).
The FOMC Chair Jerome Powell is expected to hit the newswires in a news conference in a few minutes, where he is likely to be pressed for specifics about these measures.
Outlook for Gold Price
Gold prices are expected to continue to the upside as market fundamentals continue to favour a bearish US Dollar. Gold price action is ticking closer to the previous record set yesterday at 1981.20. A break of this level could bring in the $2000 price target which was forecast by Goldman Sachs a few weeks back; a forecast which was scaled upwards to $2300 yesterday.
On the flip side, a pullback cannot be ruled out if profit-taking resumes or if FOMC Chief Powell holds off on some of the dovish stances that markets expect the Fed to assume. This may allow some selling to 1918.68 or 1900.76 as the initial targets. Bulls may decide to use any price dips as possible re-entry points to initiate new uptrend moves.
Gold Price Daily Chart