Fed blackout period in gold trading
The Fed blackout period is when Fed officials stop speaking publicly on policy, from the second Saturday before an FOMC meeting until the day after it ends.
Also called FOMC blackout, Quiet period, Fed silence period
The Fed blackout period is a rule under which FOMC participants refrain from public comments about monetary policy around each meeting. It begins at midnight Eastern time on the second Saturday before the meeting and ends at midnight the day after the meeting.
How it applies to gold trading
Outside the blackout, speeches by Fed officials regularly move gold, especially when a voting member hints at the next decision. During the blackout that source of news stops. Gold then trades mainly on economic data, the dollar, yields and geopolitical news, and markets often settle into positioning ahead of the decision. Some traders find gold ranges more in the blackout, others note that data surprises move it more because no official can soften the reaction.
Once the blackout ends, a burst of speeches often follows within days, as officials explain their votes. Those speeches can extend or reverse the decision-day move.
Worked example
Example (hypothetical numbers): an FOMC meeting ends on a Wednesday. The blackout begins at midnight on the Saturday 11 days earlier and ends at midnight Thursday. During it, a hot CPI report drops gold from 4,030 to 4,000 and no Fed official comments. On Friday after the meeting, two officials speak and gold recovers to 4,020.
A common mistake
Expecting a quiet market just because Fed officials are silent. Data and global events still move gold in the blackout.
See also: FOMC, FOMC minutes, Hawkish and dovish, Economic calendar.
Frequently asked questions
When does the Fed blackout start and end?
It starts at midnight Eastern time on the second Saturday before an FOMC meeting and ends at midnight the day after the meeting.
Does gold move less during the blackout?
Not necessarily. Fed speeches stop, but data releases and global news still move gold, sometimes more sharply.
Can Fed officials say anything during the blackout?
They can speak on topics unrelated to monetary policy, but they avoid comments about the policy outlook until the blackout ends.