Gold Slide Continues After U.S Election, Fed Decision Next

 | Nov 08, 2018 01:12PM ET

Gold continues to lose ground this week. In Thursday’s North American session, the spot price for one ounce of gold is $1224.17, down 0.21% on the day. On the release front, unemployment claims remained pegged at 214 thousand. Later in the day, the Federal Reserve winds up its policy meeting and will release a rate statement.

The Fed is widely expected to maintain interest rates, after raising rates by 25 basis points in September. The markets will be combing through the rate statement, as the tone of the statement could move the U.S dollar. The Fed has sounded hawkish in the September statement, acknowledging the booming U.S economy and reiterating that it planned to continue its stance of gradually raising rates. If the Fed statement gives a thumbs-up to the economy, gold could continue to slide.

Gold prices are down this week, as risk appetite has improved. Investors were relieved as the U.S mid-term election ended in a split decision. The Democrats regained the House of Representatives but the Republicans maintained control of the Senate. Had the Democrats taken both houses, President Trump would have been reduced to a lame duck, unable to push forward his market-friendly policies. If Trump is serious about bipartisan cooperation, he can still advance his plans for increased fiscal stimulus and lower taxes, but he will need support from the Democrats.

XAU/USD Fundamentals

Thursday (November 8)

  • 8:30 US Unemployment Claims. Estimate 214K. Actual 214K
  • 10:30 US Natural Gas Storage. Estimate 56B. Actual 65B
  • 14:00 US FOMC Statement
  • 14:00 US Federal Funds Rate. Estimate

Friday (November 9)

  • 8:30 US PPI. Estimate 0.2%
  • 8:30 US Core PPI. Estimate 0.2%
  • 10:00 US Preliminary UoM Consumer Sentiment. Estimate 98.0

*All release times are EST

*Key events are in bold

XAU/USD for Thursday, November 8, 2018