Gold price rallies after FOMC statement deemed not too hawkish

The just-concluded Federal Open Market Committee (FOMC) monetary policy meeting saw the Federal Reserve keep its monetary policy unchanged, as expected. The key Fed Funds interest rate range was kept steady at 5.25% to 5.50%. The FOMC statement seemingly walked a neutral line on policy: not too hawkish and not too dovish. The statement said the U.S. economy is growing and inflation has eased but is still elevated. The statement said no rate cuts will occur until the Fed has more confidence inflation has been tamed. Still, the statement said the Fed sees three interest rat cuts this year. Judging by the reaction of the gold market, traders deemed the FOMC statement as not being too hawkish, and that the Fed appears willing to tolerate slightly higher inflation for longer. Now the marketplace awaits the afternoon press conference from Fed Chairman Jerome Powell. Traders will closely scrutinize Powell’s remarks for clues on the future path and timing of Fed monetary policy.

The key outside markets today see the U.S. dollar index weaker after being higher before the FOMC statement. The USDX had seen a solid rebound from the March low and the bulls have the technical advantage. Nymex crude oil prices are solidly lower and trading around $81.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 4.3%.

The Bank of England holds its regular monetary policy meeting Thursday.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com