Gold is consolidating at the low end of the recent range as the FOMC begins their two-day meeting. Heightened risk appetite and profit taking ahead of the Fed meeting has weighed on the yellow metal since last week.
Meanwhile, geopolitical and political tensions are seen as underpinning the market. While the dollar has firmed against the yen, driven by the risk-on attitude, the broader dollar remains weak.
Import and export prices rose more than expected in August, providing further evidence that inflation may finally be picking-up. I remain skeptical.
Housing starts dipped to 1.18M pace in August, just above expectations of 1.175M. Meanwhile, the U.S. Q2 current account gap widened to -$123 .1 bln, outside expectations of -$112.6, versus a revised -$113.5 bln (was -$116.8).
When the Fed announces policy tomorrow, they are widely expected to hold steady on policy. Markets are very interested to hear specifics on balance sheet normalization and to glean any clues as to the Fed’s intentions for December. That evidence might be found in the economic projections and Ms. Yellen’s press conference.