Gold futures had a double-digit price decline today with the most active December futures contract giving up $17.80 or 0.92%. As of 4:57 PM EDT gold futures are currently fixed at $1918.90 after opening this morning at $1935.10. Gold traded to a high of $1935.50 just $0.40 above its open, and a low of $1917.20.

Never assume one has a good read on upcoming decisions by the Federal Reserve regarding changes to their monetary policy. While it was correctly assumed that the Fed would pause rate hikes at Wednesday’s FOMC meeting, the updated dot plot was like a curveball that few if any were able to anticipate.

The rate hike pause by the Federal Reserve was already factored into market prices; but the hawkish tone almost assures that interest rates will remain elevated not only through the rest of this year but well into 2024 was not. The revision to the Federal Reserve’s monetary policy sent shockwaves through the financial markets at large.

Today, the Federal Reserve concluded the September FOMC meeting. As it pertains to gold, gold spiked to its intraday high of $1968.90 immediately following the release of the policy meeting statement which included the most current revised economic summary or dot plot.

The Federal Reserve will conclude the September FOMC on Wednesday. The meeting will be capped with a new policy statement and interest rate decision which will be released at 2 PM EDT and a press conference by Chairman Powell to be held at 2:30 PM EDT.

Next week the Federal Reserve will begin its sixth Federal Open Market Committee (FOMC) meeting this year. The Federal Reserve convenes and holds its FOMC meetings eight times per calendar year. It is during these meetings that Federal Reserve members discuss their economic projections and vote on any changes it will implement regarding their monetary policy such as rate hikes or cuts.

Like a one-two punch, yesterday’s CPI report combined with today’s PPI report suggests that inflation is and will remain persistent. Specifically rises in wholesale prices will be passed down the consumer chain. This implies that the level of inflation is likely to remain elevated well into next year.

The CPI (Consumer Price Index) was released this morning, and predictions that headline inflation had risen by 0.6% last month forecasted by economists polled at the Wall Street Journal were spot on. Last month inflation had its largest month-over-month gain this year.

Market participants are waiting for the CPI (Consumer Price Index) report which will be released tomorrow. According to economists polled by the Wall Street Journal, the report will reveal that headline inflation increased by 0.6% last month. If their predictions are correct this would be the largest increase since June 2022. This would take inflation from 3.2% in July to 3.6% last month.

Gold futures opened at $1943.80 then rose to $1954 in one hour beginning at 9 o’clock EDT. This rise was not sustainable with gold giving back those gains and trading to a low of $1940 before slightly recovering. As of 5 PM EDT gold futures basis the most active December contract is currently fixed at $1942.60 which is a net gain of $0.10.