Commodity Trade Mantra

Posts Tagged ‘FOMC Meeting’

A Buy Position in Gold - Heads I Win, Tails I don’t Lose

Markets have now priced in a 100% chance of a Fed rate hike in December. Gold is just waiting for confirmation from the Fed in a few weeks. We have a “Heads I win, tails I don’t lose” situation. If you take a long position in gold today & the Fed raises rates, nothing happens to the price because the rate hike is already priced in. But if the Fed does not raise rates, gold prices will spike suddenly & dramatically.

QT Driven Overdue Stock Bear will Fuel a Big Renaissance in Gold Investment

The main beneficiary of stock-market weakness is gold investment, as the leading alternative investment that tends to move counter to stock markets. The coming QT-driven overdue stock bear will fuel a big renaissance in gold investment to diversify stock-heavy portfolios. As QT slowly strangles this monstrous stock bull, gold investment will really return to vogue.

Gold Prices Pullback, But Gold Bulls Have Nothing to Worry About

Gold prices have fallen from a $1,260 peak to just under $1,200 as rate-hike expectations have grown. Despite this, we think that gold prices have been relatively resilient as the dollar failed to rally substantially as a result of the behaviour in US real yields. In the short term, those who are long gold might not have to suffer too much more downside.

Gold Prices to jump $200 by end of 2017: Bank of America

Gold may be under pressure in the run-up to the next Federal Reserve rate hike, but prices are expected to rally by around $200 by the end of the year, according to the corporate and investment banking division of Bank of America. While tighter monetary policy is not bullish, inflation and a range of uncertainties, including European elections and protectionism should support gold prices.

Inflation, US Dollar, Gold & the Interest Rate Action by the Fed

The evidence of inflation is starting to emerge. When will the markets begin to see that the Fed is not serious about nipping inflation in the bud? We don’t know the answer but any rate increase could be the one that looks too timid and too late compared to the inflation data. As the markets begin to take note, the dollar will weaken and gold will once again behave like an inflation hedge.

Gold Trapped Between $1220 - $1180; India's Gold Demand Key

The up-move in gold, has been gradual as investors brace this week’s slew of important US macro releases. This week’s FOMC meeting, and the keenly watched US monthly jobs report, would be looked upon for fresh clues over the central bank’s near-term monetary policy outlook and eventually determine the next leg of directional move for the non-yielding yellow metal.

Silver Seems Ready to Break Out Off Significant Support - Buying Opportunity Beckons

After taking a look at the ups and downs of the silver market pre- and post-election, there seems to be a major opportunity developing. Also the fact that the silver price is now below a rising 200-day moving average suggests a high probability that it will turn up soon. We maintain our view that silver prices will then return to a modest bull market.

Weekly Outlook for Silver Prices - Volatility in Gold Prices on the Rise

At present, the bias in silver prices is to the upside, as new buying appeared to be behind last week’s advance in prices, as open interest increased nearly 6% through Thursday. In addition, the U.S. economic calendar for the week is full. The possibility of victory for Trump & a second US interest rate hike could cause increased volatility in gold & could rise as high as $1,425.

Gold Futures Traders Breath Easy as Dovish Fed Powers the Next Major Rally

Gold futures surged after the Fed again chickened out on raising its benchmark interest rate. Gold futures speculators’ fear of Fed rate hikes has been a major drag on gold. Rate-hike risks just plummeted in the coming months, since the Fed can’t risk acting heading into the critical US presidential election. Gold’s next major upleg is likely just unleashed by the Fed.

If the Fed does What it Wants to, the Result will be the Opposite of What it Wants

The US economy is slowing perceptively. What should the Fed be doing? They might want to cut interest rates. Problem. Another tool in the arsenal – cheapen the US dollar. Again there is a problem. Whether that works & what is a good idea are separate issues. Certainly a rate hike would take the stock market down 20%. It’s going to be just the opposite of what the Fed wants.

Gold Prices Soften While Fed Officials Hard-Sell Rate Hike Hopes

Gold prices corrected gently lower after testing trend line resistance set from early July. Near-term support is at 1333.62, the 23.6% Fibonacci retracement. Fed officials may rekindle volatility via bits of guidance before the pre-FOMC meeting blackout period. Hawkish overtones may boost rate hike speculation, boosting the US Dollar and weighing on gold prices.

The Federal Reserve Came, Saw, Did Nothing – Catching On The Fed Game?

This has become modus operandi for the Federal Reserve over the last two years. As each FOMC meeting approaches, speculation about a possible rate hike ramps up and then the Janet Yellen does…nothing. The one exception was last December, and that turned out to be a complete disaster. Interestingly, the mainstream is starting to catch on to the game.

Gold and Silver Rally to be Fuelled by More Monetary Easing

July has not been kind to either market, with gold falling 4% lower from the month’s high, while its silver lost 9%. Easing is back on the table in the UK, while the ECB and Japan are also likely to be more dovish. From a technical point of view, both markets seemed to be primed for a sharp rebound, with silver in a descending triangle and gold in a symmetrical triangle.

Gold and Silver Rally to Resume from Around 26th Sept - Expect Volatility Till Then

I believe that the bull run in gold and silver, that paused in its tracks in July, will continue swinging both ways with a high degree of volatility till Sept end, but will be back in a more vigorous and ferocious form soon after. I strongly believe that this bull-run-on-steroids phase in gold and silver will take off around 26th September 2016. Secure your tomorrow ….today.

Timeline For Gold Price Movements & The Next Gold Price Rally

It’s possible that gold could trade as low as $1285 and back near its 50-day moving average before bottoming. This area has proven as support all year. Expect a renewed rally in August back to near, but likely not exceeding much, the highs of late June & early July. Something between $1370 – $1390. Another tumble in mid-late Sept & finally, a breakout to new 2016 highs in Oct and Nov.

Gold and Silver Bulls Need to Climb The Great Wall of Worry

Confidence is slippery, even when you are a metals investor sitting atop the best performing assets of 2016. It doesn’t help when 4 years of a miserable bear market remains fresh in our memories. Any weakness in gold and silver prices & it can feel like they are ready to plunge. World events are unpredictable. In bull markets some of the biggest moves happen suddenly, when people least expect it.

We’re Near a Major Turning Point in the Currency Wars

In the currency wars, it looks like a recent quiet period is over and war is entering a new major battle. The US dollar went from an all-time low in August 2011 to a 10-year high in mid-2015. But the strong dollar finally caught up with the US economy, which has been slowing down precipitously. There are critical turning points where a long-term directional trend is set to reverse.

A Stock Market Correction Has Only Been Postponed, Not Avoided

Markets are relieved that the Fed won’t hike rates in March. But, the markets are never satisfied. Getting stock market expectations aligned with the intended FOMC policy path will not be pretty. Expect higher volatility and stock market drawdowns in April and May as markets reprice. A further stock market correction has been postponed, but not avoided.

Will a March Fed Rate Hike lead to Crashing Market Expectations?

Will a Fed rate hike in March lead to a train wreck by crashing into market expectations? It depends on whether Janet Yellen can signal the markets that her Cannonball Express is not stopping. Casey Jones died frantically pulling the train’s whistle. Janet Yellen needs to start blowing the Fed’s whistle and warning markets now — before it’s too late.

This is not 2008 – At least not for Gold Prices

Both, low energy prices & higher real interest rates are already reflected in the current gold prices. As longer-dated oil prices cannot remain below industry costs indefinitely, nor real interest rates rise much higher given a data dependent FED, this creates an asymmetry to gold prices, regardless of broader market normalization – or capitulation.

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