Gold

The threatened rate increase – which just about everyone has had enough of discussing – is like getting pecked to death by ducks. You become so insensate at the constant noise and poking that eventually you throw your hands up and surrender.

So, let’s look beyond that for a moment. There are other great riddles in the markets today to contend with.

Today’s U.S. jobs report served to bolster expectations that the Federal Reserve will raise interest rates at their next meeting six weeks from now.

The expectation was that the U.S. would gain about 180,000 jobs in the latest Department of Labor report. The truth was 50% more than that as October’s job gains clocked in at 271,000.

Markets that trade in New York and Chicago found themselves not so much down as they were downbeat in tone, searching for some direction other than Fed Chairwoman Janet Yellen’s hawkish rate comments yesterday before Congress.

“It could be appropriate” to act at the Fed’s final policy-making meeting of the year in mid December, Fed Chairwoman Janet Yellen told the House Financial Services Committee.

She said the American economy was “performing well,” hinting that if growth continued apace, the Fed could start raising interest rates next month. She added a warning, however: “No decision has been made.”

If you look closely at the manufacturing data released today by the U.S. Department of Commerce, you’ll quickly see that the worst of the industrial slump is over or almost over.

Non-defense capital goods (excluding aircraft), a crucial measure of business confidence and spending plans, slipped a mere 0.1% instead of the 0.3 percent drop reported last month (August).

The Commerce Department said that U.S. construction spending rose 0.6 percent in September to the highest level since March 2008, pushed up by a surge in apartment building.

A week that started with fear over what the Federal Reserve might do in its meeting just concluded this past Wednesday, ended up being a good week for equities, and, in spite of major bumps in the road, a very good week for crude. Gold seems to be puzzled by what went down at the Federal Open Market Committee meeting on Wednesday.

What the U.S. Federal Reserve sees in an apparently weak Q3 GDP report is entirely different from what currency traders and equities traders think they are seeing. (It’s possible that precious metals traders got it right.)

The central bank concluded this month’s FOMC meeting earlier today, alluding to the potential that rate hikes or “lift off” could still begin in December 2015.

Whether or not the initiation of rate hikes will begin this year is not off the table according to recent statements made by the Federal Reserve.

Conventionally, people would say: “The dollar is steady before the Fed statement Wednesday afternoon.” We would say: “The dollar, like other markets – with a few exceptions – has no idea what it’s doing.”