Gold continues to gain value as traders and market participants glean the minutes from last month’s FOMC meeting which were released yesterday. The probability of an interest rate hike in December remains high, an 87% probability based on the CME’s FedWatch Tool. This occurs in light of a U.S. equities market that continues to break records and close at new all-time highs.
The Federal Reserve released the minutes from its September meeting this morning. In essence, it showed that although there is still a high probability of an interest rate hike in December, that rate hike is not etched in stone.
Dollar weakness, as well as concerns regarding the current conflict between the United States and North Korea, have been supportive of gold pricing today. As of 4 o’clock EDT, gold futures are trading at $1291, up six dollars (+0.48) on the day. Trading to an intraday high of $1296.70 today, gold prices came within striking distance of $1300.
The war of words continues, as over the weekend statements made by leaders in both the United States and North Korea have once again taken this verbal conflict up another level. The war of words 2.0 continues.
Although gold prices closed lower on the week, prices recovered with a gain of 6 dollars. Reacting to today’s US jobs report, as well as gauging market sentiment from members of the Federal Reserve to determine whether or not a December rate hike is still in play, traders were able to move the market into solid positive territory by the close.
According to the Federal Reserve, the process is called quantitative normalization. This is a process by which the Fed reverses the actions and the net effect of the actions taken during the protracted period of quantitative easing.
Gold futures have moved up modestly today and are currently trading at $1277.90, a net gain of $3.30 based on the most active December 2017 contract. Today’s gain comes based on a combination of three-parts dollar weakness, and two-parts traders bidding up the precious yellow metal.
A risk-on environment as well as a high probability that the Federal Reserve will implement one last interest rate hike this year have weighed heavily on the price of gold. As such, both of these factors appear to still be in play, with U.S. equities once again gaining value and closing at a new all-time record high.
The first day of the last quarter of 2017 began with the dollar surging to higher ground. As of 4 o’clock EDT, the dollar index is trading up 59 points (+0.64) at 93.475. Obviously, commodities traded or paired against the dollar had a reciprocal downside move.
Gold continues to trade under pressure, closing lower on the day and lower on the week. Losing roughly $18 on the week, gold futures broke below $1300 per ounce to settle near $1283. This marks the third consecutive week in which gold prices have closed lower.
