Gold

For the fourth consecutive day, gold prices have closed higher, now trading to a 2 ½ week high. Gold futures today rose roughly 3 dollars to close at $1233 per ounce. This a continuation of the dramatic rise in gold prices witnessed on Wednesday of last week, immediately following the conclusion of this month’s FOMC meeting.

This was a most interesting week as members of the Federal Open Market Committee concluded their meeting on Wednesday. As expected, they announced the decision to raise their benchmark rates by 25 basis points. This was the first rate hike this year, the second rate hike in four months, and the third rate hike since the economic meltdown of 2008.

After only one day since the conclusion of this month’s FOMC meeting, not only are market participants digesting the most recent information by the Fed, they are also reacting to the information presented to them.

As anticipated, today the Federal Reserve announced an interest rate hike at the conclusion of this month’s FOMC meeting. This wil raise the benchmark rate for Fed funds from .75 % to 1 %. This is the first interest rate hike in 2017 and the second rate hike in four months.

The long anticipated FOMC meeting began today. It seems to be a near certainty that this meeting will result in a rate hike. This occurs as the net result of statements which have been made recently by various members of the Federal Reserve.

As they await this month’s FOMC meeting, which will begin tomorrow, the financial markets are in a virtual holding pattern. It is widely expected that the Federal Reserve will raise the interest rates as one of the outcomes of this meeting. This will be the first rate increase in four months, as well as the first rate hike of this year.

Today’s report of new jobs added in February came in well above analysts’ estimates. Before the release of the report, analysts estimated that a total of 190,000 new jobs were added in February. According to today’s report, there were 235,000 (nonfarm payroll) new jobs added in February. This is the second month in which the report has exceeded expectations.

traders await tomorrow’s jobs report, along with next week’s FOMC meeting, gold continues to lose value. Obviously, the looming interest rate hike has not been fully factored into gold’s current pricing. As the selloff continues, it is taking prices to nearly $1200 per ounce.

“In this world, nothing can be said to be certain, except death and taxes.”

Benjamin Franklin

Although famously attributed to a Benjamin Franklin letter written in 1789, Christopher Bullock’s saying might need updating given the apparent certainty of an interest rate hike by the Federal Reserve in March.

For the last six consecutive days gold prices have moved lower. This is in anticipation of a potential interest rate hike later this month when the Federal Reserve meets on March 14-15.