Market Nuggets
RBC's Gero: Gold Weaker After Fed Hints 'More Hikes On Tap'
Gold futures are on the defensive the day after the Federal Reserve hiked U.S. interest rates and hinted that more monetary tightening is on the way, says George Gero, managing director with RBC Wealth Management. As of 8:49 a.m. EDT, Comex December gold was $7.20 lower to $1,191.90 an ounce. “Gold sellers [are] still around after rate hike and Fed cautionary tone for more hikes on tap,” Gero says. The December gold contract has been as low as $1,191, its weakest level since Aug. 24.
By Allen Sykora of Kitco News; asykora@kitco.com
BBH: U.S. Dollar Stronger In Wake Of FOMC Meeting
Thursday September 27, 2018 09:06
The U.S. dollar is stronger after the Federal Reserve hiked interest rates by another 25 basis points on Wednesday and was clear that more tightening is to come, says Brown Brothers Harriman. This has ramifications for precious metals since they tend to move inversely to the U.S. dollar. The euro has fallen below $1.17 after trading around $1.17378 late Wednesday. “A break below $1.1635 is needed to set up a test of the September low near $1.1525,” says BBH. “The Fed is sticking with its preferred rate path of one more hike in 2018, three in 2019, and one in 2020. The Fed has stronger conviction with regards to that last hike this year, however, with 12 officials now seeing it versus eight in June.”
By Allen Sykora of Kitco News; asykora@kitco.com
Commerzbank: Gold Rises In Euro Terms Due To Italian Budget Wrangling
Thursday September 27, 2018 09:06
Gold has risen in euro terms as European markets focus on Italian budget uncertainty, says Commerzbank. There is a dispute over the level of the budget deficit. “The two governing parties, the League and the Five Star Movement, are apparently keen to stipulate a significantly higher budget deficit of 2.4% than the non-partisan economics minister is willing to accept,” Commerzbank says. “Media reports claiming that the economics minister would then consider resigning have since been denied. Nonetheless, the political uncertainty in Italy is putting pressure on the euro this morning and has pushed the gold price in euros to over €1,020 per troy ounce.” Gold has since pulled back slightly to €1,016.22, but gold in euro terms remains modestly higher on a day when the precious metal has fallen in most other currencies.
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