Commodity Trade Mantra

Posts Tagged ‘FOMC Meeting’

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.

Shorts Savage Gold Futures After a Hawkish Surprise by the Fed

American gold futures speculators just savaged gold again on their historically-wrong and irrational belief that Fed rate hikes will decimate gold. Last week’s surprisingly-hawkish FOMC statement unleashed furious gold futures selling, battering gold back below its new uptrend’s support line. Futures shorting soon reverses, as those positions must soon be covered.

The Fed Can’t Raise Interest Rates, But Must Pretend It Will

The Fed must succeed in continuing to postpone rate hikes into the future without breaking peoples’ expectation that rates will rise at some point. It has to send out the message that rates will be increased at, say, the forthcoming FOMC meeting. But, as the meeting approaches, the Fed would have to repeat its trickery, pushing the possible date for a rate hike still further out.

Goldman Calls It: No Rate Hike Until Mid-2016

There you have it: no rate hike until mid-2016, which as we said previously, means no rate hike at all since the “apolitical” Fed will never hike just before a presidential election, and more importantly, by then the epic inventory liquidation-driven recession will have already started, making the only question that matters in the summer of 2016: NIRP or QE4.

A Sept Rate Hike Is Not Even Close: Goldman's 7 Reasons Why Yellen Will Delay... Again

On one hand, every economist, virtual portfolio manager, Yahoo Finance Twitter expert & TV talking head is certain that a September rate hike is inevitable. On the other hand, the bank that runs the NY Fed, Goldman Sachs is doubling down on its call that the Fed will not hike in September. So here is Goldman’s Jan Hatzius with seven reasons why Yellen will delay. Again.

Gold Price Correlation With Federal Funds Rates Since 1971

Everyone assumes higher interest rates will devastate zero-yielding gold, leaving it far less attractive. This premise led investors to avoid gold like the plague, and speculators to short sell it at wild record extremes. But provocatively, history proves gold price thrives in Fed-rate-hike cycles. Higher rates are actually bullish for gold.

Chinese Devaluation Extends To 3rd Day - Yuan Hits 4 Year Low

Having devalued the Yuan fix by 3.5% in the last 2 days, China did it again, shifting Yuan to 4 year lows. While confusion reigns over why PBOC would intervene at the close to strengthen the Yuan last night, the reality is the commitment isn’t to a devaluation for China’s exports, but its actions are directed toward trying to keep the wholesale finance interfaces somewhat orderly.

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