The gold futures contract lost 2.40% on Wednesday, as it broke below its recent local lows following the FOMC Statement release. On June 1 gold price was the highest since early January. In April the market has bounced from the support level marked by March 8 local low of $1,663.30. Since then it has been advancing. This morning gold is trading close to $1,800 price level, as we can see on the daily chart (the chart includes today’s intraday data):
Today gold is 0.7% lower. What about the other precious metals? Silver is 1.2% lower, platinum is 1.4% lower and palladium is 1.9% lower today. So precious metals are lower this morning.
Yesterday’s Building Permits and Housing Starts releases have been slightly worse than expected. But the markets have reacted to the FOMC Statement announcement at 2:00 p.m. The Fed increased its interest rate paid on required and excess reserve balances from 0.10% to 0.15%.
Today we will get the Unemployment Claims and Philly Fed Manufacturing Index releases. We will also have the Bank of Japan Monetary Policy Statement later in the day.
Where would the price of gold go following yesterday’s FOMC release? We’ve compiled the data since January of 2017, a 51-month-long period of time that contains of thirty five FOMC releases. The first chart shows price paths 5 days before and 10 days after the FOMC release. We can see that the biggest 10-day advance after the FOMC day was +10.5% after March 15, 2020 release and the biggest decline was -7.2% after March 3, 2020 release. But we’ve had an increased volatility following coronavirus fear then.
The latest FOMC Statement release came out on April 28. Gold price was 2.8% higher 10 days after the release.
The following chart shows average gold price path before and after the FOMC releases for the past 35 releases. The market was usually declining ahead of the FOMC day. Then it was going up for a week-long period. We can see that on average, gold price was 0.64% higher 10 days after the FOMC Statement announcement.
Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days:
Thursday, June 17
- 8:30 a.m. U.S. – Unemployment Claims, Philly Fed Manufacturing Index
- Tentative, Japan – Monetary Policy Statement, BOJ Policy Rate
Friday, June 18
- Tentative, Japan – BOJ Press Conference
For a look at all of today’s economic events, check out our economic calendar.
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