Commodity News

Commodity news, technical and fundamental analysis, market data on precious metals, energies, industrial metals, soft commodities, and Bitcoin


Gold & Silver Profit from Dovish FOMC Statement

July 26, 2017 at 21:53 by Vladimir Vyun

Gold and silver rallied today following the release of policy statement from the Federal Open Market Committee, which traders considered to be relatively dovish. In particular, the FOMC voiced concern about inflation:

On a 12-month basis, overall inflation and the measure excluding food and energy prices have declined and are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.

Despite that, the Committee said:

Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.

Another important part of the statement was the mention of unwinding of balance sheet soon:

The Committee expects to begin implementing its balance sheet normalization program relatively soon, provided that the economy evolves broadly as anticipated

But with no mention of monetary tightening, market participants thought that the Federal Reserve will push the next interest rate hike to a later date. CME FedWatch shows that speculators do not expect the Fed to make a move at least until December. There is roughly a 50% chance of a December hike.

Futures for delivery of gold in December rallied 0.65% to $1,266.7 per troy once as of 21:36 GMT on COMEX today. September contract for silver gained 0.56% to $16.64 per ounce.

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