Gold Remains Volatile Ahead of U.S. Key Economic Fundamentals, Markets Eye U.S. FOMC Meeting Minutes; Feb 17, 2021

U.S. FOMC Meeting Minutes

The key event for the day will be U.S. FOMC Meeting Minutes. It’s a detailed record of the FOMC’s most recent meeting, providing in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates. U.S. FOMC released Interest rate decision on Jan 27 and kept interest rate unchanged at 0.25 pct. U.S. dollar rose sharply after FOMC’s Interest rate decision and hawkish press conference. Today FOMC will release minutes of its Jan 27 meet.

Key highlights from most recent FOMC Meet by Fed’s Powell:

  • A long way from a full recovery.
  • Real unemployment rate is closer to 10%.
  • Not going to adopt a formula on inflation
  • Very unlikely that we’ll see troubling inflation
  • We will be patient and not react when we see modest bumps in inflation

Let’s see how Gold has reacted during the previous data release:
Jan 06:

Nov 25:

In addition, U.S. will release Industrial Production as well as Capacity Utilization Rate. It’s a leading indicator of economic health – production reacts quickly to ups and downs in the business cycle and is correlated with consumer conditions such as employment levels and earnings. On the other hand, capacity utilization rate is a leading indicator of consumer inflation – when producers are nearing full capacity they respond by raising prices, and the higher costs are usually passed on to the consumer.

Let’s see how Gold has reacted during the previous data release:

Jan 15:

Dec 15:

Technical View:

XAU/USD (Gold): Gold recovers slightly from previous losses and hovers around $1,790 mark. The pair made intraday high at $1,795 and low at $1,783 mark. The Day and H1 charts suggest the bearish trend for the time being. A sustained close above $1,794 requires for the upside rally. Alternatively, current downside trend will test key supports.

Key Resistances: $1,802, $1,808, $1,817, $1,822, $1,828

Key Supports: $1,782, $1,776, $1,772, $1,764, $1,758

Take a look and do trade wisely!
Good Luck