Gold resumes pre-Fed meeting uptrend, gains new impetus

AFTERNOON UPDATE

Gold broke abruptly to the upside in the wake of the Fed meeting then leveled before surging again in late afternoon trading. It is now up almost $11.50 on the day at $1357. Silver is up 14¢ at $15.16. Gold’s behavior suggests both a resumption of its uptrend before the meeting and new impetus from the strong undercurrent at the FOMC toward a more accommodative rate policy. Though the actual vote was 9-1 to keep rates where they are, the Fed’s dot plot shows a divided committee on rates with eight of 17 members forecasting rate reductions by the end of 2019. The strongest reactions thus far have been in the safe-haven category – gold and U.S. Treasuries. The 10-year Treasury yield dropped from 2.09% to 2.03%. The stock market was clearly disappointed moving higher by only 40 points in the meeting’s aftermath.

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