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Opinion with Peter Hug

Gold Price: After The Fed

Peter Hug

Kitco Commentaries | Opinions, Ideas and Markets Talk

Featuring views and opinions written by market professionals, not staff journalists.

Commentaries & Views

(Kitco News) - We saw a classic sell the news event yesterday. The market, expecting more than the 25 bps priced into a Fed cut, was disappointed and the metals took it on the chin. We expected the sell the news event on a 25 bps cut and took the opportunity to add to our long position on the $1,402 support level this morning. The Fed had no choice but to drop rates yesterday after the market had the move fully priced in, but the reluctance to signal a change in direction spooked the market. We continue to believe the path for all central banks is one of easing and remain constructive on gold unless we lose the $1,397 level on a close basis. Besides the easing path of the Central banks, the global macro issues continue to create a volatile scenario. Brexit, Iran, North Korea, issues with financial stability in Europe, and an equity market that looks stretched all suggest gold’s trajectory is higher.

By Peter Hug

Contributing to kitco.com

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