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CME Group: April Metals Volume Falls 23% From Year Ago

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Exchange operator CME Group reports that metals volume averaged 528,000 contracts per day in April, down 23% from 682,000 in the same month a year ago. However, CME group reports one highlight -- record copper options daily volume of 14,000 contracts on April 23. On a rolling three-month basis, metals volume averaged 549,000 contracts for the period ending with April. This is down from 561,000 for the three-month period ending with March, but up from 510,000 for the comparable period ending with February and 544,000 for the period ending with March.

By Allen Sykora of Kitco News; asykora@kitco.com

 

TD Securities: FOMC Undercuts Gold; Prices May Be Range-Bound

Thursday May 2, 2019 09:17

Federal Reserve Chair Jerome Powell cooled hopes for a rate cut on Wednesday and thus pulled one leg out from underneath the gold market, suggests TD Securities. Some had been expecting the next Fed move on monetary policy to be loosening, which is normally supportive for gold. “While the Fed's reiteration of its patience initially met the market's dovish tilt, Powell's presser highlighted that the central bank views the recent weakness in inflation as transitory in nature — a hawkish statement that likely confirmed a perma-hold approach for the Fed,” TDS says. “The gold bugs, in turn, saw the impetus to purchase bullion fall along with the market's implied probability of a cut before the year's end.” As of 9:14 a.m. EDT, spot gold was $8 lower to $1,268.30 an ounce. For gold to stage a material rally, TDS figures the metal will need more weak economic data. “In this context, we suspect that gold and silver prices could remain range-bound for the time being,” TDS says. 

By Allen Sykora of Kitco News; asykora@kitco.com

 

BBH: FOMC Sends ‘Either Way’ Message On Interest Rates

Thursday May 2, 2019 09:17

The Federal Open Market Committee gave messaging Wednesday that could be construed as “either way” for the future direction of U.S. interest rates and a “pushback” against those expecting a rate cut, says Brown Brothers Harriman. The FOMC left the Federal funds target range at 2.25% to 2.50%, although it cut the interest rate paid on excess reserves by 5 basis points to 2.35% in a move designed to push down the effective Fed funds rate, which had crept up to 2.45%, BBH says. The FOMC statement was a bit dovish, suggesting muted inflation, BBH says. However, in his press conference, Fed Chair Jerome Powell was less dovish, stressing that transitory factors were pushing inflation down, BBH continues. He added that various global risks had moderated, including the Chinese and euro-zone economic outlooks, progress on trade tensions and lower risks of a hard Brexit. “Powell stressed that the Fed remains on hold for now and that there is no case for moving rates either way,” BBH says. “What’s the takeaway? We think the ‘either way’ phrase was meant as a subtle pushback to markets that are pricing in rate cuts….Simply put, unless a recession becomes the base case, rate cuts are highly unlikely.”

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