Opinion with Peter Hug
Gold Holds Support In Face Of Hawkish Fed Perceptions
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
(Kitco News) - Metals dropped sharply yesterday after the release of the FOMC meeting minutes for December. The perception that the Fed presented a hawkish perspective generated profit taking in the metals and reversed the recent dollar weakness. I read the minutes a little differently. It appears there is growing concern within the Fed of what the impact of aggressive rate increases will do to the economy and I remain unconvinced that the Fed will move more than twice in 2018, and there remains enough evidence that they may not move at all in the early part of 2018. The correction in metals would likely have occurred in any case, as we suggested the market looked overextended. Both gold and silver held support after the sell-off and the dollar reversed its pop right at the 1.20 euro/dollar level. Itâ€™s possible we have seen the correction, but would want to see gold take out the $1,322 level for a more serious upside move. Silver is having issues at $17.22 but a break here suggests $17.58. If the market has topped short term you would expect to see a retest of support today.