Gold, Dow, US Dollar Outlook as FOMC Looms


Paid Making Scene: Gold Price, Dow Jones, US Doller Viability Viability Approved Erode Fame Announcements

  • Federal Reserve to announce interest rate decision on Wednesday, July 29
  • FOMC meetings indicate large swing in volatility measures in asset classes
  • Gold, Dow and US Dollars May Respond Violently to Fed Chair Powell’s Comment

Whenever a FOMC decision is due, traders are usually on high-alert. federal Reserve – now the largest central bank of total assets placed on its balance sheet – often sparks with market volatility from time to time Monetary policy update. Evidence of average market activity around Fed meetings is indicated by measures of volatility, such as Average-true-range (ATR), Recently taken to sleep, Dow Jones, and US Dollar Index.

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Gold Price on FOMC Decision Day

Gold Price Chart The Fed Meets Gold Volatility Around FOMC Decision

On the FOMC decision days, gold price performance has a faster fluctuating trend than average gold volatility. Whenever the Fed’s announcement crosses the wires, the gold notched limit exceeds its respective 20-day ATR. This is mainly highlighted by the positive ‘relative volatility’ series, which shows the percentage above or below its average daily range compared to the preceding month.

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Dow Jones Principal Violence on Dom John’s Day (Chart 2)

DJI Price Chart Dow Jones Industrial Average Stock Market Volatility Fed Interest Rate Decision

Likewise, shares have experienced historically elevated market activity around Fed meetings. The intraday range recorded by the Dow Jones Industrial Average whenever a FOMC statement is issued suggests that in general, the Federal Reserve may catalyze additional volatility.

Read more – Nasdaq, S&P 500 Outlook: FOMC Bids Hope As Reform Potential

US Dollar Index Price Volatility on FOMC Decision Day (Chart 3)

Volatility Around USD Price Chart DXY US Dollar Index FOMC Decisions

USD price action also underscores a narrative in view of FOMC meetings Instability Readings. TJIndicated by US Dollar Index Performance, which is The tendency to print larger-than-normal fluctuations around Fed interest rate decisions.

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said that, Prudent market participants may want Think well Adoption Risk management technique– like Stops teasing or Executed Small position size – When gold, dow and US dollar trade around Fed trading.

Read more – US Dollar Pace Consumer Confidence Vains as Big Declines for July

— written by Rich dwarka, Analyst for DailyFX.com

Connected with @RichDvorakFX Twitter for real-time market insights

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