Gold

A strong U.S. dollar has tempered any real upside move in the precious metals markets today. Although traders are currently bidding up the all the precious metals, only silver, platinum and palladium have closed with positive gains.

Gold is trading modestly higher today, with the most active December’s futures contract currently trading up $3.20 and fixed at $1221.50. Today’s net gain is a direct result of fractional buying as well as a modestly lower U.S. dollar.

Interesting but muted action has been present in gold prices recently. In fact, over the last six trading days, gold futures (basis the most active December Comex contract) have traded in a range containing a lower high than the high achieved on the previous day.

Gold futures continue to trade under pressure today, with the most active December Comex contract currently down $7.60 and fixed at $1,215.60, a net decline of 0.62%.

Although gold futures finished fractionally higher on the day, it has closed lower on the week. This now marks the fourth consecutive week in which gold futures have closed lower and below the open on Monday.

The fact of the matter is that most market participants are acutely aware of the fact that the strategy of quantitative easing has ended and no longer guides the Federal Reserve’s monetary policy.

In a statement released following the conclusion of this month’s FOMC meeting, the Fed announced that Fed funds would remain unchanged. “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 1-3/4 to 2 percent.”

The Federal Open Market Committee (FOMC) began its two-day meeting today which is scheduled to end tomorrow afternoon. Following the conclusion of this month’s FOMC meeting will be a statement in which a policy decision will be announced.

As we start this week -- traders, investors, and market technicians are waiting for the monthly FOMC meeting to commence. Beginning tomorrow and concluding on Wednesday, the Federal Reserve will meet. Market participants will be listening for any indication as to the direction of the Fed’s monetary policy.

Gold futures closed lower on the week, losing value for the third consecutive week. More foreboding is the fact that not only has gold closed at the lowest value this year, but the last time gold futures closed near this level was almost a year ago.