With the November FOMC meeting concluding tomorrow many analysts and news sources are reporting the possibility that the Federal Reserve will announce or at least give subtle hints that they might begin to scale down their aggressive stance on interest rate hikes.

PCE Still High Despite Rate Hikes

The last day of October is ripe with terrifying news, and it has nothing to do with Halloween.

This morning the BLS (Bureau of Labor Statistics) released the latest inflation report vis-à-vis the PCE index for September 2022. The report revealed what Americans already know, that the cost of goods and services remains exceedingly.

Tomorrow at 8:30 EDT, the BLS (Bureau of Labor Statistics) will release the latest inflation report vis-à-vis the PCE index for September 2022. This will be the most recent data that the Federal Reserve will have on inflation and therefore be a key component to their sealing the fate of the size of the next rate hike at next week’s FOMC meeting.

Golf futures basis the most active December 2022 Comex contract is currently up $11.20 and fixed at $1669.70. Noteworthy was today’s intraday high of $1679.40 which came in just below the first level of resistance at $1680. However, once again we can see that while gold’s gains are respectable, they are based entirely upon dollar weakness.

One might think that with the increased geopolitical uncertainty and recent dollar weakness that gold would have strong gains. However, that is absolutely not true in trading today. As of 5:15 PM EDT, the most active December contract of gold futures is currently up only $3.30 or +0.20% and fixed at $1657.40.

Gold investors and traders are reacting strongly to any shift in the Federal Reserve’s narrative concerning upcoming interest rate hikes. This was seen on Friday when a single article published by the Wall Street Journal resulted in strong gains for gold.

Gold futures basis the most active December 2022 contract as of 5:05 PM EDT is currently fixed at $1662.50 after factoring in today’s net gain of $25.70 or 1.57%. This strong gain was based upon differences among voting Federal Reserve members as they debate whether or not to decrease the size of the interest rate hike at the December FOMC meeting.

Gold in the spot and futures markets gave up all of the small gains after the New York session ended and is now trading lower on the day. Gold futures gained $2.60 and settled at $1636.80 in New York trading today. However, that modest gain was erased after the New York markets closed and Globex opened.

In an exclusive interview with Kathleen Hays of Bloomberg News today Federal Reserve Bank of St. Louis President James Bullard reinforced the resolve of the Federal Reserve to continue their aggressive rate hikes to curb high inflation.