Asian stocks fell today as investors are waiting for the Federal Reserve`s policy statement. The FOMC (Federal Open Market Committee) will end a two-day policy meeting today, after data yesterday indicated the U.S home-building industry is stabilizing.
Investors are still very cautious and The Fed will probably water down their forward guidance and keep U.S interest rate low for at least another 18 months. The FOMC will further scale back its bond-buying at the meeting.
They will probably reduce purchases for the third time by $10 billion to a $55 billion monthly rate. Gold had the longest slump since mid December 2013. What is going on with the precious metal? Are the first stage in the gold bull over?
Gold has declined before the meeting and are now trading at $ 1345,10. Nobody knows what Janet Yellen will say today, but it is expected that the gold will bottom out today before the meeting and then go up again.
Traders will probably sell on rumors of Fed tapering and will cover shorts and buy after the announcement. Gold broke out of its first stage, and now have a sharp pullback to previous resistance. Gold is volatile so it is expected.
Now, it will be interesting to follow the bond market. It seems like it is on the way to break out to the upside. If TLT ETF who tracks the value of the 20-year treasury bond breaks out, the rates will drop. So, how will that be if the Fed buy fewer bonds?
Right after the Fed meeting, I will follow the gold price, stock market, bond market and the interest rate. Janet Yellen can move the market, but it depends on what the news is? I look forward to the FOMC meeting today.
|02:00 AM ET||FOMC Economic Projections|
|002:00 AM ET||FOMC Statement|
|02:00 AM ET||Federal Funds Rate|
|02:30 AM ET||FOMC Press Conference|
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