Gold and the broader markets are treading water while investors and traders await the release of the November minutes of the Federal Open Market Committee later today.
Since the Fed announced a further 75 basis point hike to its benchmark interest rates at the start of this month, sentiment has shifted to how quickly the US central bank will be able to slow the pace of future rate increases. Today’s publication of the minutes could serve as a reminder of the more dovish position at the time and prompt a fresh rally for equities and gold alike.
Gold has found itself driven for much of the year by the actions of the Fed and the comments by its officials so investors will be poring over every word of these minutes to determine the likely trajectory of the Fed’s interest rate curve over the coming months. While another rate hike is near certain in December, the key question is whether it will be another 75 basis point hike or a more conservative 50 basis point move.
While the majority of eyes are on the Fed today, gold investors will keep half an eye on the continued fallout from the collapse of crypto giant FTX. The breakdown in trust and credibility that FTX’s bankruptcy caused for the wider crypto community has benefited gold with investors moving their funds to the haven asset that has endured through centuries of stock market bubbles and crashes, as well as human conflict.
In the current scenario, the prospect of further interest rate hikes will keep a ceiling on the price of gold, while the broader market jitters exacerbated by FTX are likely to keep prices supported above $1,700 on the downside.
Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News.
As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwash while investing sustainably.
This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis
