Today President Trump announced his selection to be the next head of the U.S. Central Bank, and Chairman of the Federal Reserve, Jerome Powell. The new Fed chair will hold many distinctions which will separate him from his predecessors.
The statement released immediately following this month’s FOMC meeting revealed what many analysts and market participants believed would be the outcome of this month’s meeting: that the central bank would leave interest rates unchanged.
Gold prices traded under strong selling pressure today as the Federal Open Market Committee meeting begins. This two-day meeting will conclude tomorrow with a statement, and although no real changes are expected, traders and market participants are waiting in a holding pattern.
As of 4 o’clock EDT, gold futures are trading up $5.50 on the day, with December’s futures contract currently fixed at $1277.30. This marks the second day of higher pricing in gold.
Donald Trump was elected president largely due to his promises to revitalize America. His plan to achieve that goal included ending and replacing Obamacare, starting massive infrastructure projects, and providing sweeping tax cuts for corporations as well as individuals.
If we just look at gold prices as reflected through buyers and sellers today, gold closed $3.70 higher on the day. Of course, precious metals pricing, including gold, is paired or traded against dollars so that any price change must reflect dollar strength or weakness and then be added to the current price of gold.
After trading to a new intraday low of $1272 an ounce, gold prices struggled to recover and closed slightly positive on the day. As of 3 o’clock EDT, gold futures are trading at $1279.30 per ounce for a net gain of a dollar on the day.
As of 430 EDT, physical gold is currently fixed at $1276.60, a net loss of $5.40 on the day. This price decline can be broken down into its components, which for today are four-parts selling and one-part dollar.
After trading to an intraday low of $1273.60, gold prices recovered as the U.S. equities markets went negative, closing up three dollars at $1283.50. Some analysts claim it was short covering from futures traders along with bargain hunters bidding up the precious yellow metal that led to this recovery.
Traders, analysts, and market participants have been intensely focused on who will be at the helm of the Federal Reserve come February of next year, as well as on the potential for a tax cut.
