Gold back above $3,000 at start of week
LONDON (March 17) Gold’s price (XAU/USD) trades right at $3,000 at the time of writing on Monday following Friday’s take-profit-led correction after hitting a fresh all-time high of $3,005. Traders are bracing for a rather eventful week with the German Bundestag set to vote on the defense spending plan, which would boost the European industry by €1 trillion, on Tuesday. On that same day, United States (US) President Donald Trump is scheduled to meet Russian President Vladimir Putin on a possible peace deal for Ukraine.
As if that is not enough, the US Federal Reserve (Fed) and its Federal Open Market Committee (FOMC) convene on Tuesday and Wednesday before issuing its latest monetary policy decision. Traders will be eager to see how every FOMC member will vote and pencil in forward guidance on the Dot Plot (Philips) curve. Expectations are for no change in the monetary policy, while expectations for a rate cut in May or June constantly increase and decrease day over day.
Daily digest market movers: Pivotal week
- President Trump said he will speak with Russian President Vladimir Putin on Tuesday as the US presses for an end to fighting in Ukraine and European nations rush to bolster their support for Kyiv, Bloomberg reports. Trump confirmed that the discussion will be about territory and dividing up certain assets, and there is "a very good chance" for a deal.
- UBS Group AG became the latest bank to raise its price outlook for Gold on increasing chances of a protracted global trade war, a scenario analysts expect will continue to drive investors to scoop up more of the precious metal haven asset. UBS sees the same level as BNP, with Gold trading at $3,200 in the second quarter.
- The CME Fedwatch Tool sees a 99.0% chance for no interest rate changes in the upcoming Fed meeting on Wednesday. The chances of a rate cut at the May 7 meeting currently stand at 27.5%.
FXStreet
