- US dollar turns negative ahead of the FOMC statement; DXY falls under 90.80.
- Metals benefit from the weaker dollar and as US yields stabilize.
Metals recovered strength during the American session and ahead of the FOMC decision. Gold prices bounced sharply from weekly lows back above $1770. The yellow metal awaits Powell with a positive intraday tone.
Gold erases losses as USD tumbles
XAU/USD bottomed earlier on Wednesday at $1762, the lowest level since April 15. It then rebounded and recently climbed to $1775, erasing daily losses. The move higher took place amid a retreat of the US dollar.
The DXY fell to 90.77, while EUR/USD jumped to test 1.2100. The greenback also fell sharply versus commodity currencies and even against the yen. Lower equity prices in Wall Street did not provide support to the dollar.
Market participants await the outcome of the two-day FOMC meeting. Monetary policy is expected to remain unchanged. The focus will likely be on the tone of the statement (18:00 GMT) and on Powell’s press conference (18:30 GMT).
Silver also recovered but not as much as gold. While XAU/USD is flat after the rebound, XAG/USD is still down 0.85% for the day, hovering around $26.00.