{"id":105874,"date":"2017-05-11T06:48:38","date_gmt":"2017-05-11T10:48:38","guid":{"rendered":"http:\/\/countingpips.com\/?p=105874"},"modified":"2017-05-11T06:48:38","modified_gmt":"2017-05-11T10:48:38","slug":"xauusd-forex-technical-analysis-fed-policy-tightening-weighs-on-gold-prices","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/05\/xauusd-forex-technical-analysis-fed-policy-tightening-weighs-on-gold-prices\/","title":{"rendered":"XAUUSD: Forex Technical Analysis – Fed policy tightening weighs on gold prices"},"content":{"rendered":"
May 11, 2017<\/div>
\r\n<\/div><\/div>

By IFCMarkets<\/a><\/p>\n

Fed policy tightening weighs on gold prices<\/strong><\/p>\n

Inflation near Fed\u2019s target threshold 2% and strong labor market support Fed policy tightening. This will strengthen the US dollar and pressure gold. Will gold<\/a> continue falling?<\/p>\n

The win by centrist Emmanuel Macron in French presidential election runoff on May 7 removed the major political uncertainty supporting gold prices recently. The defeat of National Front leader Marine Le Pen eliminated the danger to European Union integrity: Marine Le Pen had vowed to hold a referendum on European Union membership in six months time if she won. She also supported abandoning euro. With a major bullish factor removed, gold prices remain subject to the same bearish factor \u2013 tightening of Fed monetary policy. On Tuesday Kansas City Fed President Esther George said the central bank should still stick to gradually raising rates despite some recent soft data such as low first quarter GDP at 0.7% annual rate and lower auto sales. George supported also shrinking Fed\u2019s balance sheet later this year by reducing reinvestments in maturing mortgage-backed securities and long-term Treasury securities. In last week\u2019s FOMC statement central bank policy makers deemed first quarter GDP as \u2018transitory\u2019, noting that consumer spending continued to be solid, business investment had firmed and inflation has been “running close” to the Fed’s target. According to the CME\u2019s FedWatch tool, fed fund futures traders are pricing in an 88% chance of a rate increase at the US central bank\u2019s June 14 meeting.<\/p>\n

\"XAUUSD\"<\/p>\n

The XAUUSD: D1 <\/b> has fallen below the 200-day moving average MA(200) on the daily chart, and the support line of the uptrend.<\/p>\n