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The gold market is a bit weaker Monday as investors prepare for this week’s FOMC meeting announcement. It is widely expected that the Fed will again raise interest rates by 75-basis points, marking the fourth consecutive hike of 75-points by the central bank in recent months. It is also expected that the Fed will raise rates again next month to finish off the year on a hawkish note.

Price action in gold and silver may remain fairly subdued ahead of Wednesday’s Fed announcement and press conference. The biggest question on investors’ minds currently may be when the Fed may look to take its foot off the gas and take a pause from its aggressive rate hikes. The Fed may largely dictate price action for gold in the weeks ahead. The central bank is highly unlikely to take its foot off the accelerator before the new year gets underway, and even if it elects to do a smaller hike in December it may not be enough to appease investors that want to see increasing dovishness in monetary policy.

Concerns over a Fed-induced recession seem to have abated to a large degree in recent weeks. The economy has remained strong, with jobs remaining robust and little signs of a recession right around the corner. That could change and change quickly, however, if the Fed keeps the pedal to the metal into 2023. While stocks have seen some increased volatility in recent months, they are currently trending higher again and do not seemingly believe that a recession is approaching quickly. The uptrend in equity markets may give the Fed more wiggle room to stay on its current course, and the central bank could very well find itself hiking rates aggressively into 2023. Investors have seemingly accepted more hikes into the end of the year, but next year is another wildcard altogether.

That makes the Fed’s commentary Wednesday even more important. The investing public has grown somewhat accustomed to a hawkish Fed. Many do not believe, however, that the Fed will stay on its current path until inflation reaches its desired annual target of 2%. At some point, the Fed may throw in the towel and decide to take a break or even reverse course and start easing again. It does not have to be today, it does not have to be tomorrow. Investors do want to know when it may be, however, and that the Fed is already thinking about it.

For the time being, the $1600 and $1700 levels remain key technical market areas. Whichever side is breached first, on a closing basis, may see price action continue in that direction until something changes. The metal could also spend more time in between these areas as it awaits fresh inputs. Whatever the case may be, current price levels could prove to be an excellent value for the long-term investor. Gold prices are considered by some to be “on-sale” at current levels. Once the market regains its footing and resumes its long-term uptrend, recent price levels may not be seen ever again as the market moves back to all-time highs or beyond.