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FED day, anything goes for gold
Today the FOMC announces its decision on interest rates and tapering. There are many theories on what they may or may not do. We know the FED is clueless without common sense relying on 100-year-old models. The odds of them doing anything correct are remote, but even a broken clock is right twice a day.
With runaway inflation, which is calculated in favor of the government, CPI and PPI are hot but hotter than reported. The exclusions from these reports are laughable. Gold, silver, and platinum have been under pressure for the past few weeks, which tells us they are expecting a dramatic decision from the FED today.
The metals are weak; impending news will not be favorable in the short term. There is the potential for a hard sell-off depending on what the FED does today. The target for Gold is $1450 on the downside. However, there are many levels that could prevent a sell-off that big. Read More
Gold prices stuck in neutral following 0.3% rise in U.S. retail sales
The gold market is trying to claw its way into positive territory as U.S. consumers shopped less last month, highlighting a dismal start to the holiday season.
U.S. retail sales rose 0.3% last month, following October's revised 1.8% increase according to the latest data from the U.S. Commerce Department, released Wednesday; the data significantly missed expectations as economists were forecasting a 0.8% rise.
For the year, retail sales are up 18.2% from November 2020. Read More
Inflation could rise 15% in 2022 if wage pressures spiral out of control; use gold to hedge - Saxo Bank
Inflation remains one of the biggest threats to the U.S. economy. Analysts at Saxo Bank see the potential for consumer prices to rise 15% in 2022, overshadowing the last major inflationary environment seen in the 1970s.
The Danish bank's inflation forecast is part of its annual Outrageous Predictions, and while the forecast appears extreme, it is not as far-fetched as some would expect.
Last week the U.S. Consumer Price Index saw an annual rise of 6.8% in November; however, many economists note that inflation is a lot higher than the government's official reports. Read More
Gold price down as Fed speeds up tapering and sees potential for three rate hikes in 2022
Gold prices remain under pressure, as the Federal Reserve further reduces the level of bonds it purchases every month and continues to signal three rate hike next year.
Following its monetary policy meeting, the Federal Reserve as expected left interest rates unchanged at the zero-bound range; however, the central bank continues to adjust its monetary policy as it acknowledges growing inflation pressures.
“In light of inflation developments and the further improvement in the labor market, the Committee decided to reduce the monthly pace of its net asset purchases by $20 billion for Treasury securities and $10 billion for agency mortgage-backed securities. Beginning in January, the Committee will increase its holdings of Treasury securities by at least $40 billion per month and of agency mortgage-backed securities by at least $20 billion per month. The Committee judges that similar reductions in the pace of net asset purchases will likely be appropriate each month, but it is prepared to adjust the pace of purchases if warranted by changes in the economic outlook,” the monetary policy statement said. Read More
How high can gold & silver go in 2022? Rates to rise, here's the impact on markets - Gary Wagner
Gary Wagner, editor of TheGoldForecast.com discusses with David Lin, anchor for Kitco News, the impact that monetary policy next year will have on financial markets.
“I think that the Fed got it wrong. They underestimated the pace at which inflationary pressures would grow and how persistent they would be. Now that they’re acknowledging that we have persistent inflation, and taking out the word ‘transitory’, they are in my mind chasing inflation. In other words, they’re reacting to the inflationary level rather than being proactive about it. That to me is not what the Federal Reserve is supposed to do,” Wagner said. Read More
Gold erases some losses after as-expected FOMC statement
Gold and silver prices are moderately lower in early-afternoon U.S. trading Wednesday, but up from lower levels seen earlier today and just before this afternoon's FOMC statement that saw an expected hawkish Fed leaning but no big surprises. February gold did hit a two-month low in the immediate volatility after the FOMC statement, while March silver hit a 17-month low. February gold was last down $7.70 at $1,764.50 and March Comex silver was last down $0.199 at $21.71 an ounce.
The just-concluded U.S. Federal Reserve FOMC meeting's statement said that three interest rate increases are likely in 2022 and said U.S. inflation is rising but implied it will back off in the coming months. The FOMC statement said the Fed is accelerating its asset purchases tapering, which was expected. The statement also said that Fed officials remain concerned about the coronavirus and its impact on the global economy. Traders now await the press conference from Fed Chairman Jerome Powell. All of the major central banks hold monetary policy meetings yet this week. Read More
Gold price hits daily highs as Powell explains 'real-time' policy making, inflation, and maximum employment
Gold pared its losses and rose to new daily highs as Federal Reserve Chair Jerome Powell's press conference was deemed not as hawkish by the markets following the central banks' decision to double its tapering pace.
It is "really appropriate" to make this monetary policy shift due to the current state of the U.S. economy, inflation, and wages, Powell told reporters on Wednesday.
"The unemployment rate [is projected] to decline to 3.5% by the end of the year ... while inflation will run above our 2% goal well into next year," he said. "Price increases have now spread to a broader range of goods and services."
Powell clarified that the risk of persistently higher inflation is now greater, which justifies accelerated tapering pace. Read More
FOMC meeting concludes revealing an increased hawkish demeanor
The Federal Reserve concluded the last FOMC meeting of the year capped off by a statement that contained a new "dot plot" which lays out their updated monetary policy through 2024. The last dot plot anticipated that there would only be one interest rate hike in 2022. However, that changed dramatically. Currently, the Federal Reserve is anticipating raising rates three times in 2022, three times in 2023, and two times in 2024. Each interest rate hike will be ¼% or 25 basis points. This is a much more aggressive timeline for rate hikes than previously expected. Read More
Gold and silver trade higher leading into the European open
Gold (0.50%) and silver (0.51%) both traded higher overnight after a good session on Wednesday. The yellow metal is now trading at $1785/oz while silver is back above $22/oz. In the rest of the commodities complex, copper moved 0.40% higher and spot WTI is 0.93% in the black.
In terms of risk sentiment, the Nikkei 225 (2.13%) and Shanghai Composite (0.75%) traded well but the ASX fell 0.43%. Futures in Europe are pointing towards a positive cash open. Read More
Disclaimer: These articles are provided for informational purposes only. They are not offered or intended to be used as legal, tax, investment, financial, or any other advice.
