Gold prices are currently trading at around $4,175 per troy ounce, having partially recovered from a recent correction. Right now, there is one thing on market participants’ minds—the October 27–28 Federal Reserve (Fed) meeting. And, of course, the correlated dynamics of the dollar. The precious metal’s outlook in the coming weeks will depend on how things turn out.
Gold remains under the influence of the US regulator’s uncertain monetary trajectory. Last month, the Consumer Price Index (CPI) accelerated from August’s 3.4% to 3.7%, raising market concerns over stubborn inflation. However, officials appear unlikely to rush policy tightening, suggesting that macroeconomic data should be reviewed before another hike is considered. As of October 19, investors estimate a probability of a rate increase at a modest 16%, hinting that a pause could be the baseline scenario at the upcoming Fed meeting. If events unfold in line with this forecast and policymakers do not sound too hawkish, gold prices will be supported.
What else should be on your radar? The dollar index deserves attention. In mid-October, the US currency reached an 18-month peak but has since begun to correct. At the moment, the DXY is hovering near 101.8 points. A weaker greenback tends to make gold more affordable for holders of other currencies, helping to revive demand. If the dollar index continues to decline—amid expectations that the Fed may pause its monetary tightening—this will create further conditions for an increase in the precious metal.
The final recommendation:
— Buy gold at the current price of $4,175 per troy ounce, targeting $4,375 within a couple of weeks.
— Place a Stop Loss order at $4,075 to manage risks if the market moves against us.
This content is for informational purposes only and is not intended to be investing advice.
