In a week full of central bank announcements, there is no doubt in the market that the biggest focus will be on Washington DC and the Federal Reserve’s latest interest rate announcement on Wednesday. The market is pricing in an over 90% chance that the FOMC will keep rates on hold this meeting, despite stronger inflation prints and lofty energy prices in the last month. These odds up from less than 40% just a month ago, mainly on the back of much less hawkish rhetoric from Fed members over the last few weeks.
Most traders are now expecting the volatility around the event to come from the forward guidance that we get from both the statement and the subsequent press conference with the market strongly pricing in – around 75% – the chance of a 25-basis point hike at the December meeting. Anything less hawkish regarding the next meeting should see the dollar and US yields fall, while a strong confirmation that the FOMC will look to hike in December should lead to the dollar gaining ground.
Gold is sitting nicely for a big move on the update having trading strongly in line with the dollar and US yields or most of 2026. It has taken a hit over the last couple of weeks and now sits just above annual highs going into the Fed’s update. Anything on the hawkish side of things should open the way for a further break downside, while a more dovish skew could see a significant rally back into recent ranges.
Resistance 2: $4,422.50 – Trendline Resistance
Resistance 1: $4,225.09 – October High
Support 1: $3,942.00 – 2026 Low and Trendline Support
Support 2: $3,853.50 – Trendline Support
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