Gold Prices Extend Gains as USD Plunges- All Eyes on FOMC

London (July 22)  Gold prices rebounded for a second consecutive week with the precious metal surging 2.06% to trade at 1253 ahead of the New York close on Friday. The advance marks the largest weekly gain since May and has been supported by continued weakness in the greenback with the DXY down more than 1.3%. Looking ahead to next week, price action looks poised for another push higher with key U.S. event risk on tap. 

The FOMC interest rate decision is slated for Wednesday with traders looking for any alterations in the central bank’s policy outlook. Gold has been kept afloat by a softening in expectations that the Fed will inevitably delivery on its projections for another rate-hike this year. As it stands, market participants are factoring only a 52% chance for a 25bps hike in December. While the implications of a delay in normalization are bullish for bullion, prices are now targeting key longer-term resistance targets, putting the topside-bias at risk heading into next week.

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