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If It Ain't Broke, Don't Fix It - Janet Yellen Commenting On "Audit The Fed"

Wednesday March 18, 2015 3:23 PM

At the Federal Open Market Committee (FOMC) press conference Wednesday, Federal Reserve Chair Janet Yellen was asked her thoughts on the “Audit The Fed” bill, which she says may not be necessary. The bill, which has resurfaced in the headlines, looks to have Congress have a bigger role in reviewing the Fed’s structure as well as its policies. Answering the question, Yellen said she doesn’t see a need for changes to be made. “I believe the Fed is already one of the most transparent central banks of any around the globe,” she said. “I don’t think the system is broken, I think it’s working well,” she added. Although Yellen said that the Fed is prepared to offer Congress any information needed to evaluate the central bank’s decision making, she thinks it might be unwise. “To chain a central bank to follow a simple mathematical rule that fails to take account of many things that are very important in making monetary policy…. That would be a very foolish thing to do, and I oppose it,” she said.

By Sarah Benali of Kitco News; sbenali@kitco.com


U.S. Dollar Might Not Have Much Further To Go As Data Disappoints

Wednesday March 18, 2015 1:17 PM

A shift in interest expectations, and the removal of the word “patient” from the FOMC monetary policy statement, does not guarantee further gains in the U.S. dollar says, Christopher Vecchio, currency analyst at DailyFX. He notes that investors are overly bullish on the U.S. dollar but could start to focus on weaker economic data following the FOMC meeting. “U.S. data, relative to expectations, is off to its worst start in five years,” he says. “The outcome of the U.S. dollar is not so certain, in a market handicapped by overly bullish traders in the greenback, and extreme bearishness seen in positioning elsewhere.”

By Neils Christensen of Kitco News; nchristensen@kitco.com


Gold & Silver Should Start To Recover Following Fed Rate Hikes – Metals Focus

Wednesday March 18, 2015 1:00 PM

According to UK-based research firm Metals Focus, gold and silver should start to recover following the announcement of Federal Reserve rate hikes, despite their current weakness. “The main argument behind this is that a still weak U.S. economy and a lack of inflationary pressure will only lead to modest and gradual rate hikes in the U.S.,” Metals Focus analysts said in a report Tuesday. “The realization that rates will remain lower for longer (and negative in real terms) will not only see the unwinding of short bets, but also encourage investors to reconsider the investment case for precious metals.” Focusing on silver, they said they expected any meaningful gains for the metal to start appearing in 2016. “[I]t is hard to envisage silver breaking free from gold, with the ratio likely to trade between 70-75:1 for the rest of the year,” they added.

By Sarah Benali of Kitco News; sbenali@kitco.com


TDS: Many Moving Parts To FOMC Meeting Today

Wednesday March 18, 2015 12:45 PM

Analysts from TD Securities warns investors that there will be a lot of moving parts to the Federal Open Market Committee (FOMC) monetary policy decision to be released in less than two hours. They explain that markets are preparing for the release of the monetary policy statement, which if it does not contain the word “patient” could signal a rate hike in June. They add a June rate hike “feels too soon.” The second part to the meeting, analysts note, is that the central bank will also release new economic projections, which will include the Statement of Economic Projections (SEP) “dot plots” - an informal view of where FOMC members see the fed funds rate by the end of the year. And finally, following the release of the statement and projections, Yellen will conduct a press conference, providing more insight to future monetary policy. “Expect Yellen to downplay relevance of change to forward guidance, but how that resonates depends on other factors in the SEP and post-meeting statement,” they say.

By Neils Christensen of Kitco News; nchristensen@kitco.com


What Happens To Gold If Fed Removes 'Patient'? – iiTrader

Wednesday March 18, 2015 10:27 AM

Gold prices continue to struggle ahead the two-day Federal Open Market Committee (FOMC) meeting conclusion, and analysts at iiTrader say volatility lies ahead. “Despite poor economic data outside of job growth, expectations have mounted for the Fed to signal the likeliness of a rate hike in June; if this is done we expect gold prices to move through both major support levels, making new lows and testing the 1100 area,” they say. However, if the word ‘patient’ remains in the FOMC statement, “look for a short covering rally that can easily extend back towards 1199.6-1200 after stops get hit above 1168.3-1172,” they add. For silver, analysts say the metal has seen ‘brutal price action’ lately and they do not know where the metal is headed until after the FOMC meeting concludes. “Volume is totally anemic and the market is stuck in a 30 cent range. All eyes and ears will be on the Fed’s definition of the word ‘patient’ today,” they say.

By Sarah Benali of Kitco News; sbenali@kitco.com


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