The Federal Reserve’s drumbeat signaling more rate hikes is loud enough to be heard on the other side of the world. In his second day of testimony to the House and Senate Chairman Powell is reiterating his message that a “strong majority” of Federal Reserve officials are strongly committed to raising rates twice for a total of 50 basis points by the end of the year.

Chairman Powell testified before the House Financial Services Committee today. This is part of his semiannual report which will conclude tomorrow when he appears before the Senate Banking Committee. His opening statement was close to a word-for-word repeat of his opening statement at last week’s press conference.

Chairman’s Powell upcoming testimony coupled with a report revealing strong economic growth has created continuous bearish market sentiment for gold. The decline in gold futures today was so severe that the precious yellow metal gave up $23.50 with the most active August futures contract settling at $1947.70 by the close of trading in New York.

Both gold and silver investors have focused on the recent decision by the Federal Reserve that was revealed at this month’s FOMC meeting on Wednesday. The Federal Reserve decided not to raise its benchmark Fed funds rate this month after raising rates for the last 10 consecutive FOMC meetings beginning in March 2022.

Gold futures basis the most active August Comex contract traded below its 100-day simple moving average which is currently at $1950.70 after trading to an intraday low of $1936.10. However, as of 4:34 PM EDT, gold futures are trading just off the high of $1972.80 and are fixed at $1970.40.

As anticipated the Federal Reserve announced that the “committee decided to maintain the target range for the federal funds rate at 5 to 5 ¼%”. However, the core message as expressed in today’s statement and press conference by Chairman Powell was that its monetary policy will remain restrictive, hawkish, and most likely include two more rate hikes before the end of the year.

This morning the BLS (Bureau of Labor Statistics) released the most current data on the inflation rate for May, it revealed that inflation has cooled to a level not seen in over two years. Cooling inflation makes the likelihood that the Federal Reserve will not raise rates tomorrow extremely high.

This is an interview recorded and released on Friday June 9, 2023. It is with Kai Hoffman of Soar Financial and Gary Wagner

In anticipation that the Federal Reserve will not raise its benchmark interest rate at the next FOMC meeting that ends on Wednesday, June 14 market participants have moved gold prices higher for the last two weeks.

New jobless claims over the last seven days ending on June 3 increased by 28,000 individuals. This takes the jobless rate in the United States to new almost a two-year high with 261,000 Americans now jobless. In October 2022 jobless claims were just under 200,000 and peaked at 220,000 in the middle of November 2022.