**Gold Breaks $2220, New All Time High in Asia
2 Minute Read
GoldFix ZH Edit
Good Evening. Today’s activity was noteworthy and worth a recap. More so given the market behavior upon reopen during Asian hours just now.
Contents:
- FOMC Meeting Summary
- Breakdown of Events
- Market Reactions
1- FOMC Meeting Summary
The Fed, in summary communicated:
- The inflation spike was “Not terrible” and seasonal.
- The Dot plot changes were not indicative of a hawkish trending change
- QT will be slowed down (making way for QE if needed we speculate)
2- Breakdown of Events
Rates:
Powell left rates unchanged as was expected at 5.25 to 5.50%
Dot Plot:
Revealed on the surface no real change as 3 rate cuts for 2024 budgeted for. However the back-end for 2025 and further out had their anticipated cuts removed. This is decidedly hawkish and shows an intention to start to lower 2024 rate cuts if need be.
Press conference:
If Powell was hawkish in his dot plot, he was the opposite of the in his press conference.
He noted the recent inflation resurgence and implied much of that may have merely been seasonal
“There’s reason to think that there could be seasonal effects there.
When asked if the dot plot changes were the start of a trend. His response indicated they were not.
Next, when asked about the Pace of QT in lowering Fed Balance sheet holdings, Powell said they would slow offloading Treasuries and other bonds.
The general sense of the committee is that it’ll be appropriate to slow the pace of runoff fairly soon, consistent with the plans we previously issued.”
3- Market Reactions
If the reaction was muted at 2pm upon the decision announcement, the reaction to the press conference was anything but muted.
Doves took all the ball and ran with it. All markets behaved as described above. Muted but slightly bullishly, which was a little confusing at first. But once the press conference got going, It was apparent that the outcome was known to smart money.
Silver Rocketed to $25.63 up almost 3% stealing the limelight from Gold….
Gold was no slacker, but remained in its recent range. That is, until the reopen where it exploded higher obliterating previous all time highs…
Exploding $26.90 in a minute on the reopen….
The dollar was weaker…
Stocks took off…
But bonds remained muted…
Bitcoin did not react to the event much, but has a tremendous 10% move on theday anyway…
That is it.
Good night
More here
