Daily Gold Market Report

Fed Held Rates Unchanged (As Expected) – Neutral
Gold Rallied Up To Near $1950 Intraday Before Fading

(USAGOLD – 9/21/2023) After touching $1950 yesterday intraday and closing around $1930, Gold opened lower still today at $1916, down $14. Silver opens at $22.95, down 28 cents. The fed funds rate was kept unchanged in a range of 5.25%-5.5% on Wednesday after the central bank raised rates in July by 0.25%. The newly published dot plot suggests the Fed will likely raise rates by 0.25% one more time this year, and plans to hold interest rates at their historically high levels for longer than previously anticipated (indicating no rate cuts until at-least Q3 of 2024).

USAGOLD Comment:  The Fed has telegraphed it’s intention to keep rates higher for longer, likely until some disruption/crisis in the economy forces them to pivot.  With ongoing union strikes, oil prices spiking, continued international conflict, commercial real estate cracks, student loan payments resuming, historically massive Treasury issuance, and liquidity depletion in real economy, (somewhat miraculously), we have yet to see such a break.  Gold has held up quite well thus far during this Fed tightening cycle, despite persistent dollar strength and the highest Fed Funds rates in two decades (influences that have historically had a strongly adverse impact on prices) – all of which bodes well for the yellow metal when (notif’) the Fed is eventually forced to pivot.
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