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Gold Price: After The Fed

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.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.