Following march FOMC minutes gold price rebounds strongly nearly 1% from low’s on Wednesday session. Weaker equities and balance sheet shrinking plan lifts the gold price higher.

Minutes Summary:

  • Economy continued to perform about as expected
  • Several participants now anticipated that meaningful fiscal stimulus would likely not begin until 2018.
  • Many participants emphasized that reducing the size of the balance sheet should be conducted in a passive and predictable manner.
  • The medians of the projections were 2.13 percent at the end of 2018 and 3.00 percent at the

end of 2019; the median of the longer-run projections of the federal fund’s rate was 3.00 percent.

Barclays on FOMC March meeting minutes- We now expect balance sheet reduction to begin in December.

ABN AMRO- Fed set to shrink balance sheet.

ADP employment report- Private sector employment increased by 263,000 jobs from February to March.

Key risk events ahead:

April 06, Unemployment claims forecast 251k vs 258k

April 07, March non-farm payroll

ABN AMRO: We look for an increase of 160K in the private nonfarm payrolls and unemployment remaining at 4.7%.

Barclays: US non-farm payrolls are expected to increase by 20 million in March, with an average hourly wage increase of 0.3%, up 2.6% year on year and unemployment is expected to fall by 0.1 percentage point to 4.6%.

The price has been facing strong resistance at 200 Dsma multiple highs placed between 1261-1264 levels. Ahead of the Friday’s NFP trading range remains between 1238-1264 consolidation phase remains in play. In the case of a breakout above 1265, then 175 and 1280 possible, other side 1230, 1226 and 1220/1217 are the targets.

CITI FX- Our medium-term bias remains bearish on Gold given our view for higher Equities, stronger USD and higher US yields – a markets backdrop that is historically negative for Gold.