Gold and Silver See Downward Pressure With Focus on Fed

March 19th, 2018 by

The gold price rebounded from its overnight lows to unchanged at $1,313 per ounce on Monday.

Technical traders were selling the yellow metal ahead of this week’s all-but-certain hike in interest rates.

Spot silver slipped a bit farther, losing 0.4% (-6¢) to $16.27/oz.

Both platinum and palladium were slightly in the green, up about 0.3%.

Federal Reserve Takes Spotlight This Week

New Fed Chair Jerome Powell is at the helm for his first policy meeting as head of the central bank. The FOMC is almost unanimously expected to raise interest rates at this week’s meeting.

The Federal Reserve is also expected to be somewhat more hawkish going forward under Powell’s leadership.

Even though the move would hardly be a surprise, anticipation of an interest-rate hike is having an impact on markets on Monday.

The U.S. dollar was off by 0.2% to 90.05 on the DXY index.

Wall St finished up modestly on Friday yet stock markets opened sharply in the red at Monday’s opening bell.

Revelations about Facebook harvesting users’ data without their consent dragged the Nasdaq significantly lower. Nasdaq futures plunged by more than 2% this morning.

All of the precious metals (except for palladium) ended last week in negative territory following strong consumer confidence and industrial production data.

Stocks, Bonds, and Commodities All Trade Lower

Stock markets in Europe tumbled deeply into the red, with London’s FTSE leading the way 1.25% lower.

This was despite the U.K. and EU appearing to agree upon a transition deal to backstop the ongoing Brexit divorce proceedings.

The British pound sterling rallied 0.85% to $1.406. The euro was up 0.2% to trade back above $1.23 and the yen moved mostly sideways, holding at ¥106.1 per dollar.

Shares were up slightly in Hong Kong and Shanghai overnight, but Japanese indices fell by almost 1%.

Oil and gold were both near unchanged in early trading. They were just about the only assets that didn’t see losses on Monday.

WTI crude and Brent crude each added more than $1 on Friday, nearly a 2% jump, for the second straight weekly gain for the oil market.

Overall, the Bloomberg Commodity index lost 0.65%.

Bonds also fell throughout most of Europe. U.S. Treasurys likewise saw losses as the 10-year yield rose two basis points to 2.87%.

Meanwhile, the Trump Justice Department is blocking a proposed merger between AT&T and Time Warner. It’s fairly unusual for the government to step in and stop a vertical merger.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.