Gold Reverses as Fed Stimulus Questioned (GLD) (IAU)
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Last week, spot gold and SPDR Gold Trust ETF (NYSE: GLD) climbed from below $1600/oz to a high of $1629, where strong resistance was met at the top end of its trading range. A better-than-expected GDP number on Friday gave bears enough ammo to hold the line on $1630.
Wednesday’s rate decision by the Fed is the critical event for gold this week. Some investors are anticipating Fed action, although the exact extent and timing of that action are unknown.
Monday morning's downturn in gold could mean traders are paring expectations going into Wednesday’s Fed meeting, particularly in the light of Friday’s slightly stronger GDP reading. While the economy is obviously weak, Fed watchers are pushing back on expectations and the opinion is now split on Wednesday’s rate decision. As a result, traders say they are not surprised by Monday’s modest selloff.
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Wednesday’s rate decision by the Fed is the critical event for gold this week. Some investors are anticipating Fed action, although the exact extent and timing of that action are unknown.
Monday morning's downturn in gold could mean traders are paring expectations going into Wednesday’s Fed meeting, particularly in the light of Friday’s slightly stronger GDP reading. While the economy is obviously weak, Fed watchers are pushing back on expectations and the opinion is now split on Wednesday’s rate decision. As a result, traders say they are not surprised by Monday’s modest selloff.
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