Three of the four biggest central banks meet this week: the Federal Reserve, the Bank of Japan, and the Bank of England. You can read a rundown on the central bank’s here.

Here are some of the key things to look out for:

  1. The Federal Reserve is facing a tricky situation. The US election is approaching which should result in a ‘stay as we are’ position from the Fed. However, the recent sell-off in tech stocks will be a concern if it falls harder, so the Fed may want to step in to support stocks. One way they could do this would be by introducing the idea of yield curve control. If the Fed embraces YCC that will supportive for stocks and weaken the USD. Watch for a gold breakout higher in that situation.
  2. The Bank of England. The UK faces a struggling economy, a COVID-19 uptick in cases, and Brexit risks back with a vengeance. The BoE can either increase QE, cut rates / move towards negative rates, or even do both. If the BoE move towards negative rates expect the GBP to fall lower.
  3. The Bank of Japan may feel inclined to support PM Abe’s successor Yoshihide Suga. Watch out for Suga calling a snap election which could cause the Yen to rise on the risk of ‘Abenomics’ coming to an end. The BoJ should play second fiddle to politics at their upcoming meeting and no change is expected for now.

Take a look at the gold chart above. A dovish Fed will create a perfect environment for further gold strength.