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Commodities Get Unexpected Help from Fed

March 18, 2015 at 20:45 by Vladimir Vyun

While most commodities demonstrated losses during the European trading session, prices bounced strongly over the US session (though copper remained below the opening level). The aid came from an unexpected source — namely the Federal Reserve policy statement.

The Federal Reserve dropped the wording ‘patience’ from its statement, exactly as was expected by market participants. Yet instead driving the dollar up, the announcement led to a big drop of the US currency that helped raw materials to rally.

So what is the reason for such an outcome? It is the negative revision of the Fed’s economic forecasts, including the Midpoint of target range was for the federal funds rate. This suggests that monetary tightening may happen later than it was previously anticipated by traders.

April futures for gold climbed 1.76 percent to $1,168.40 per troy ounce as of 20:36 GMT on COMEX today. Futures for delivery of copper in May were down 0.04 percent to $2.632 per pound. April contract for WTI crude oil jumped 3.91 percent to $45.16 per barrel on NYMEX. May Brent crude surged as much as 6.15 percent to $56.80 per barrel on ICE.

If you have any questions and comments on the commodities today, use the form below to reply.

One Response to “Commodities Get Unexpected Help from Fed”

  1. Mr Dimitri Rusca

    Hi Vladimir Vyun, I like to Visit your blog this is very informative, thank you for sharing Commodity tips here at this platform.

    [Reply]

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