Gold gives back some of its early-year gains
The lack of dovish indicators in Fed minutes plays on market sentiment
(USAGOLD – 1/5/20230) – Gold drifted to the downside this morning, giving back some of the gains since the start of the year. It is down $7 at $1849.50. Silver is down 32¢ at $23.52. Pressing on market sentiment was the lack of any dovish indicators on rates in December’s FOMC meeting minutes released yesterday. In fact, the FOMC reported that “no participants anticipated that it would be appropriate to begin reducing the federal funds rate target in 2023.” Yet, traders, for their part, cling to the notion that a weakening economy will force the Fed to step back.
“Gold is having a great start to the New Year,” writes senior market analyst Ed Moya at the Oanda website. “Wall Street continues to pile into gold as global bond yields continue to slide and recessionary risks remain elevated. Many traders are growing confident that the end of the Fed’s tightening cycle is nearing and that rate cuts could happen at the end of the year. Gold is eyeing the $1900 level, but for that to happen we’ll need to see the bond market rally remain in place a while longer.”
Cartoon courtesy of MichaelPRamirez.com