Read the Beforeitsnews.com story here. Advertise at Before It's News here.
Profile image
By BullionVault.com (Reporter)
Contributor profile | More stories
Story Views
Now:
Last hour:
Last 24 hours:
Total:

Gold Prices Slip from $1200 Ahead of US Fed Rate Hike and Dot Plot

% of readers think this story is Fact. Add your two cents.


Adrian Ash is head of research at BullionVault, the world-leading gold trading & ownership service online…

GOLD PRICES fell $5 per ounce from the $1200 level in London trade on Wednesday, slipping ahead of the US Federal Reserve’s September decision, widely expected to take its key interest rate up to a ceiling of 2.25%.
 
Priced in the single Euro currency gold slipped within €3 per ounce of early September’s 32-month low at €1015 ahead of the Fed decision.
 
The UK gold price in Pounds per ounce fell harder, down to its lowest level since June 2016′s shock Brexit referendum result at £907 per ounce, after the opposition Labour Party voted at its annual conference to “keep all options on the table” regarding Britain’s exit from the European Union next March – including a so-called “people’s vote” on whether or not to remain after all.
 
China’s stock market bounced, recovering most of Tuesday’s drop, but other exchanges held flat overall ahead of the Fed decision as major government bond yields edged lower.
 
Adjusted for market-implied expectations for inflation, the real rate of interest offered by 10-year US Treasury bonds has doubled so far in 2018 to reach a 7-year high just below 1.0% per annum.
 
Gold prices have retreated by almost one-tenth in US Dollar terms.
 
 
The Federal Reserve’s balancesheet has meantime shrunk by 5% to a near 5-year low as it stops re-investing money from matured US Treasury bonds back into new QE purchases.
 
“There is a growing consensus for further gradual tightening given the strong incoming data we have seen,” reckons US brokerage Wells Fargo Securities’ senior economist Sam Bullard.
 
“[But] we see risks tilted dovish going into the meeting,” counters US bank Citi’s economist Andrew Hollenhorst, looking at recent changes in the “dot plot” forecasts of Fed voting members.
 
Reputed to be more dove than hawk on rates, new vice-chair Richard Clarida will today replace the vote of former New York Fed chief Bill Dudley, now succeeded by former San Fran Fed boss John 
 
Wednesday’s announcement may also cut the Fed’s promise about “remaining accommodative” says Citi’s Hollenhorst, suggesting that interest rates won’t help stimulate the economy after today’s rise and so signalling that the rate-raising starting at end-2015 is nearly done.
 
In contrast to that view, almost half of all speculative betting on September 2019′s Fed decision now sees 4 or more interest-rate hikes coming over the next 12 months, according to data from the CME derivatives exchange.
 
That figure of 49.1% has jumped from 22.9% this time in August.
 
After today’s Fed rate rise, “inflation-adjusted Fed rates will be in positive territory for the first time since 2008 – not an especially positive thing for gold,” says a note from Japanese conglomerate Mitsubishi’s strategist Jonathan Butler.
 
“In addition, a growing chorus of hawkish voices even from previously notable doves such as Governor Lael Brainard may result in the Fed revising its guidance towards more interest rate hikes in the next 1-2 years, with revised upwards expectations on inflation and growth.”
 
Looking at futures market positions however, “There is still plenty of room for further short covering” in platinum,” says Butler, noting that a reduction in bearish bets “helped lift platinum prices last week”.
 
Platinum today edged back to $826 per ounce, some $2 down for the week so far.
 
Silver in contrast held above last Friday’s finish, trading at $14.42 after jumping to new highs for September on Tuesday, up 1.8% to touch $14.56 per ounce.
 
Latest data from US regulators the CFTC say hedge funds and other speculative traders in Comex silver futures and options cut their heavily bearish betting for a second time running last week, but kept it near series-record highs equal to 7,007 tonnes of metal.

Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK’s leading financial advisory for private investors, Adrian Ash is the editor of Gold News and head of research at BullionVault – winner of the Queen’s Award for Enterprise Innovation, 2009 and now backed by the mining-sector’s World Gold Council research body – where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2010

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.


Source: https://www.bullionvault.com/gold-news/gold-price-092620183



Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!


Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST


Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)

Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen!

Nascent Iodine - Promotes detoxification, mental focus and thyroid health.

Smart Meter Cover -  Reduces Smart Meter radiation by 96%! (See Video).

Report abuse

    Comments

    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    MOST RECENT
    Load more ...

    SignUp

    Login

    Newsletter

    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.