Commodity Trade Mantra

Posts Tagged ‘Rate Hike’

Rate Hike Largely Priced into Gold and Silver - What about Rationality in Sell-off?

Could the FED finally raise rates before 2016 draws to a close? That sounds plausible in theory, but there are a number of factors that do not support a rate hike in the near term. But even if they do hike rates, this move is already largely priced into gold and silver. We should question the rationality of this sell off. After all, the gold price often moves higher along with interest rates.

What Triggered a Meltdown in Gold and Silver Prices Last Week

The markets entered October with lots of traders still willing to hold out for higher prices as long as prices weren’t breaking down. Across the table sat the bullion banks, heavily short & pushing for gold and silver prices to fall. The impasse broke when the stronger dollar & higher rates pushed metals below technical support. Weak-handed speculators ran for the exits.

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.

Silver will be the Top Performing Asset in 2017

Silver had a massive run from the lows of $15.83 to $21.22 &is set to rally higher. No markets rise vertically, a 50% Fibonacci correction is a healthy and accepted norm. The weaker hands are out of silver, whereas, the stronger hands have bought the white metal at lower levels. You need to invest at the right time and to be positioned properly for when high volatility strikes.

History Says Markets Could Crash in the Cruelest Month - September

What month is the great menace for markets? September… What could possibly go wrong? Turns out the 30 days ahead are peppered with land mines that could go off with…detonative effects on the market. One of them is Sept. 21. The markets have most definitely not “priced in” a rate hike. It will sell off violently if the Fed goes ahead and raises rates.

Gold Sparkles Most when Dark Clouds Loom over the Economy

After disappointing US economic growth data was released, gold jumped 1.2%. Weak data is good for gold because it decreases the chances of a rate hike soon. If US economy continues to struggle, the Fed could delay its next rate hike. If the dollar index breaks below 93, it could be a strong indication that a new downtrend in the dollar has started. And this could give a big boost to gold prices.

Traders Fear Debt Market Distortions Signal "Something Big Is Brewing"

It appears the mainstream is beginning to recognize that something very strange is going on in debt markets. Whatever the reason, the severity of the distortions is unnerving many investors. The big question remains whether there is “something bigger brewing under the surface that so far hasn’t been pinpointed yet.”

Is It Finally Time to Buy Gold? Here's the Answer...

Why is everyone getting whipsawed by gold these days? With all the new talk of no rate hike until 2016, more easing across the globe & hints of negative interest rates coming soon, it’s really no surprise that gold speculation (in both directions) is heating up right now. What gold is experiencing so far is a bear market rally, with no clear signal as a longer-term trade.

Will They Or Won't They? Five Fed Meeting Scenarios & Market Impact

Even beyond the immediacy of this Fed decision, the high likelihood that the Fed will still hike in 2015 even if it passes on doing so this week is contributing to levels of 3m implied volatility being near the highs of the year. Here are Credit Suisse’s 5 scenarios & possibilities that could emerge from today’s FOMC.

Crashing Inflation Expectations Suggest Imminent Launch Of QE4

Summarizing it all: The last three times inflation expectations tumbled this low, the Fed was about to launch QE1, QE2, Operation Twist and QE3. And the Fed is now expected to hike rates in less than a month even as inflation expectations are the lowest since Lehman? The Fed is damned if it hikes rates & its credibility is damned if it launches QE4. Good luck.

The Real Reason the Fed Has To Raise Rates in June

If we assume the same continuous trends regarding employment, GDP, retail spending etc. that US has been producing for the last 12 months, then things are going to get real uncomfortable for the Fed and markets come the Sept FOMC Meeting. Markets should actually be begging the Fed for a June rate hike.

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