FOMC Statement is a Precursor to Multiple Events This Week

The statement released immediately following this month’s FOMC meeting revealed what many analysts and market participants believed would be the outcome of this month’s meeting: that the central bank would leave interest rates unchanged.

According to today’s FOMC statement, “In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1 to 1-1/4 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.”

Furthermore, the Fed minutes revealed a strong labor market that continues to expand along with solid economic data. “Information received since the Federal Open Market Committee met in September indicates that the labor market has continued to strengthen, and that economic activity has been rising at a solid rate despite hurricane-related disruptions.”

It is still widely believed that although the Fed left interest rates unchanged this month, there is a 98.2% probability that they will raise rates to 1.25 - 1.50 in December, according to the CME’s FedWatch tool.

Looking forward, there are still two upcoming events this week that could dramatically influence current market sentiment.

President Trump will announce his choice for the next Federal Reserve chairperson on Thursday. According to the Wall Street Journal, “President Donald Trump is likely to announce Federal Reserve governor Jerome Powell as his nominee to be the next chairman of the U.S. central bank this week, according to a person familiar with the matter.”

Analysts also expect solid employment numbers on Friday, when the US employment report will release October’s nonfarm payroll numbers. Currently, estimates for Friday’s numbers are that 315,000 new jobs were added last month.

Silver Shines Brightest Amongst the Precious Metals Today

Given that these upcoming events could have a dramatic impact on precious metals pricing, at least for today, current market sentiment was extremely bullish.

Precious metals began to rally in trading overseas last night. Gold traded to an intraday high of $1281.90, up over $11 on the day, before settling at $1276 an ounce for a net gain of $5.50 on the day. However, it was silver that produced the greatest gains in trading today. Silver futures surged over 2.8%, gaining $0.47 to close at $17.165.

Wishing you as always, good trading,