Upcoming influencers for gold pricing

The major focus of precious metals traders continues to be the FOMC meeting which began today, and will conclude on Wednesday. In the case of this week’s meeting by members of the Federal Reserve, no new news is the best that gold bulls can hope for. In other words, comments to the effect that the Federal Reserve will maintain its current monetary policy which includes the purchase of $120 billion worth of bonds per month and keeping interest rates between 0% and ¼% for an extended period of time at least until the end of 2022.

However, in the case of this first FOMC meeting the Fed is faced with a double-edged sword. One side of the sword contains the current economic conditions that exist because of the ongoing global pandemic. The second side of the sword contains the assumption that once the pandemic has run its course (which will occur as more and more individuals become vaccinated), then the economic recovery could be extremely robust given the pent-up demand which is a result of the lockdowns and business closures to stop the rapid pace of transmission the coronavirus.

Currently the Fed is predicting that the GDP numbers for 2020 which have not been released yet will come in around -2.4%. This differs from estimates by the World Bank which is forecasting that the United States GDP declined by 3.6% in 2020.