• Gold bulls jump into action around a dovish FOMC minute.
• Thanksgiving holidays around the corner are holding up the bid.

Gold had rallied to a high of $1,753 on the back of a dovish set of Federal Open Market Committee minutes but has since come off to test below $1,750 again and is oscillating between the range of the move. Thanksgiving holidays are upon us which likely means there are fewer participants around the event. 

Nevertheless, the minutes show that a substantial majority of participants at the November meeting judged a slowing in the pace of the interest rate hikes would likely still be appropriate. In other key statements, the minutes showed that a slower pace of rate hikes would better allow the FOMC to assess progress toward its goals given the uncertain lags around monetary policy. A few participants said slowing the pace of rate hikes could reduce the financial system risks; others that slowing should await more progress on inflation.

Prior to the event, the US PMI data had given the US Dollar bears a head start before the FOMC minutes were released. A slew of US economic data (including durable goods orders, PMIs, claims, new home sales, and final Michigan sentiment), for the most part, was solid but the emphasis was put on the shocking result in the US Manufacturing PMI that missed expectations by a mile:

• US: S&P Global Manufacturing PMI drops to 47.6 in November vs. 50 expected

The US Dollar index, as a consequence,  has fallen more than 1% toward 106, the lowest since mid-August, as traders raise bets of only a 50 bps rate hike by the Fed in December.

US Dollar H1 chart

Gold technical analysis

The price has shot higher into resistance and the bulls will look for a discount on the backside of the trendline for a higher price ahead. With the Thanksgiving holidays, markets have fewer participants and hence there is little in the way of a follow-through so far.