Gold has posted considerable losses in the Wednesday session. In North American trade, the spot price for one ounce of gold is $1195.52, down 0.46% on the day. On the release front, New Home Sales edged up to 629 thousand, just shy of the estimate of 630 thousand. In the U.S, the focus is on the Federal Reserve, which is virtually certain to raise the benchmark rate to a range between 2.00% and 2.25%. On Thursday, the U.S will publish Final GDP and durable goods orders.
Gold prices are sensitive to interest rate moves, so traders can expect some movement from gold during the North American session. Even though a rate hike has been priced in by the markets, investors are awaiting the rate statement, as policymakers weigh in on the strength of the economy and perhaps on future rate policy. What will be the tone of the rate statement? The U.S economy is in excellent shape, with GDP for Q2 expected at 4.2%, unemployment hovering below 4 percent and inflation moving closer to the Fed target of 2 percent. However, the escalating global trade war has raised concerns that it could cool down global economic growth and hurt the U.S economy as well. Still, another rate hike in December is pegged at 78% according to the CME, and some experts are predicting up to four rate hikes in 2019. If the Fed message to the markets is one of optimism, risk appetite will increase and gold prices could continue to move lower.