impact on XAUUSD Price to Amid Fed Rate Cut and Powell’s Dovish Speech

On December 17, 2024, gold prices (XAUUSD) are set to rise following the Federal Reserve’s decision to cut interest rates and Fed Chair Jerome Powell’s dovish speech. The move signals a shift in monetary policy toward easing financial conditions in response to slowing inflation and economic uncertainties. This change significantly supports gold, as it thrives in a lower interest rate environment.

Today’s given signal : https://t.me/calendarsignal/16422

Fed Meeting Outlook – Wednesday, 19:00 GMT

Press Conference: 19:30 GMT

The Federal Reserve is expected to deliver its third consecutive rate cut, but investor focus shifts to 2025.

Key Focus: The Dot Plot

What it shows: Forecasts for inflation, unemployment, growth, and interest rates.
Expectation:
- A hawkish dot plot could signal a slower path for rate cuts in 2025.
- This would disappoint markets hoping for rapid easing of rates.

Mathematical Context for Impact

Current Rate Expectations:
- Markets expect 3-4 cuts (0.25% each) in 2025 → Total 1.0% drop.
Hawkish Scenario:
- Fed projects fewer cuts → Only 2-3 cuts in 2025 → Drop of 0.50% – 0.75%.
- Market Impact:
  - DXY: Strengthens → Bullish USD.
  - Gold (XAU/USD): Falls → Bearish due to higher borrowing costs.
Dovish Scenario (if Powell calms markets):
- Fed assures rapid rate cuts if economic conditions worsen.
- Impact:
  - DXY: Weakens → Bearish USD.
  - Gold: Bullish momentum.

Powell’s Role

In the post-decision press conference, Chair Jerome Powell will attempt to strike a balanced tone:

Acknowledging economic strength (hawkish).
Offering reassurance to act swiftly if needed (dovish).

Summary

Base Case: Hawkish dot plot → Slower rate cuts → Bullish USD, Bearish Gold.
Press Conference: Powell may soften the hawkish tone to ease markets.

Mathematical Impact on Rates:

Market expectation: 3-4 cuts = 1.0% drop.
Hawkish projection: 2-3 cuts = 0.50% – 0.75% drop.

This meeting will have a significant impact on USD, Gold, and global markets.

Previous released data results :

On last rate cut decision Data (7-11-2024) we predicted higher rate cut data with less dovish statement by FED, & as per that we suggest to SELL XAUUSD & as a result, we made a profit of 38 points according to the signal we gave.

Check the previous blog : https://blog.forextrade1.co/powell-will-about-to-influence-gold-today-as-per-the-fomc-data-18-9-2024/
Check last given signal : https://t.me/calendarsignal/15889
Performance : https://t.me/calendarsignal/15901