FOMC minutes TONIGHT... and our XAU?

The FOMC minutes from the November 2 meeting are scheduled to be released on Wednesday, just ahead of the Thanksgiving holiday. The key message delivered by Powell at this meeting was that the pace of rate hikes will slow down as needed, and that will likely remain the highlight of the minutes as well. However, Powell managed to deliver this message hawkishly at the press conference, but the risk from the minutes remains tilted to the dovish side. There is likely to be little consensus about whether the rates are in restrictive territory or there’s still room for that, and the divide within the committee remains key to watch as investors remain on the edge to expect a Fed pivot sometime in 2023.

The bearish reversal from gold that followed the successful hold of the 38.2 percent Fibonacci retracement of the March 8th peak high to November 3rd range low at approximately 1,790 seems to have run out of short-term steam. The four-day slide was fairly persistent given the standard consecutive day trends of the past 12 months, but the progress was somewhat wanting. Over that same period of retreat through Monday, the market had only lost -2.3 percent in altitude which is meaningfully smaller than four-session moves through early October, throughout September and other periods in 2022. Where the market semes to have found a temporary sense of balance, there doesn’t seem to be much in the way of high-profile technical precedence. The 38.2 percent Fib of the November rally is down at 1,722 while the 20 and 100-day simple moving averages are further down at 1,711. That lack of chart-based guideline can foster volatility, but – as with most markets – the potential for trend will be undermined by thinning liquidity heading into Thanksgiving.