Gold clings to small daily gains near $1570, eyes on FOMC

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  • Wall Street’s main indexes extend recovery for second straight day.
  • US Dollar Index stays above 98 handle on Wednesday.
  • FOMC is expected to keep its policy rate unchanged.

The XAU/USD pair seems to be having a hard time finding direction on Thursday as investors are taking a break from coronavirus headlines while waiting for the FOMC to announce its policy decisions. As of writing, the troy ounce of the precious metal was up 0.27% on the day at $1570.

The risk sentiment on Wednesday fails to provide a directional clue to the safe-haven gold. While the 10-year US Treasury bond yield is erasing more than 2%, major equity indexes in the US are all up nearly 0.5% boosted by upbeat earnings figures.

USD stays strong on Wednesday

Although the latest headlines surrounding the coronavirus outbreak don’t give any reason for optimism in the near-term, stock markets’ performance and the broad USD strength doesn’t allow the pair to gain traction. At the moment, the US Dollar Index is up 0.16% on the day at 98.13.

Previewing the FOMC meeting, “our team expect the meeting statement to be mostly unaltered relative to December’s communique and with the absence of an updated Summary of Economic Projections, that leaves Chair Powell’s press conference as the most likely source of new information,” said Deutsche Bank analysts. 

Chairman Powell will be delivering his remarks at 19:30 GMT, 30 minutes after the FOMC releases its policy statement.

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