Gold Mellow On Low-key Fed

Gold Mellow On Dovish Fed

On Wednesday, Fed Chairman Jerome Powell said he feels comfortable with the current policy and is likely to keep interest rates steady for an extended period of time.

He went on to say, “We do think our policy stance is appropriate right now. We don’t see a strong case for moving in either direction.”

Therefore, Wall Street Traders are just shaking their heads trying to make sense of the mundane outlook presented by the Fed Chairman. One Wall Street Gold trader said “That was the most lackluster comment I’ve heard in all the years, by a Fed Chairperson.”

After the FOMC announcement many investors viewed the comments as dovish, noting a concern for the lack of inflation. The S&P rallied strongly, the 10-year Treasury yield dropped 2.459%, as the Dollar Index fell to 97.14. Some Gold investors liked the news and rallied the price sharply, reaching $1287.30.

Later in the press conference, a comment made by the Chairman describing the softness in inflation as “ transient”, suddenly caused a sharp reversal in the markets, as the prospects for the Fed cutting rates in the near and intermediate term diminished.

For the time being I expect the spot price of Gold to remain range bound
between $1,264 and $1,284.

Have a wonderful Friday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.