Ex Federal Reserve Advisor Danielle DiMartino Booth sees the new Jay Powell as the old Jay Powell. The Chair of the Federal Reserve has pivoted back to his hawkish stance.
The “retiring” of the phrase “transitory inflation” signals Jerome Powell intends to tackle inflation head-on and speed up their plans to taper their bond purchase and bring forward interest rate hikes.
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From The Trading Desk
Market Update
Some volatility finally returned to the markets, which was not unexpected and you could argue was overdue.
It just needed a trigger to set things off which came with the news of the new coronavirus variant, Omnicron.
What exacerbated the moves was this all happened over US ThanksGiving week where there were low volumes and shorter trading hours in the US.
The news of the new coronavirus variant’s spread affected all markets strongly when it broke on Friday, but the headlines continue to unsettle investors with new travel restrictions and lockdowns imposed globally as nations took steps to prevent the variant from spreading.
The Fed added fuel to the volatility yesterday.
We heard from Federal Reserve Chairman Jerome Powell as he appeared before the senate committee.
What we got was a more hawkish fed which triggered massive bond market volatility which impacted the USD along with the Gold price.
The Gold price was intact and trading as high as $1811 before the meeting, shedding $40 at one point before settling at $1780.
There was finally acknowledgment that inflation is no longer ‘transitory with Powell saying ‘it’s probably a good time to retire the word ‘transitory’ to describe inflation’!
The Fed will meet later this month (14th-15th December) and Powell expects policymakers at this meeting to discuss accelerating the timetable for the tapering of monthly bond purchases by more than the $15 billion per month schedule which was only announced last month.
Powell said tapering could wrap up a ‘few months sooner’ than anticipated with Citi Group economist saying the Fed could even double its reduction to $30 billion a month.
This may also open the door to interest rate hikes thereafter as the Fed tries to get a handle on inflation that is climbing at the fastest pace in three decades.
Minutes from the meeting indicated that committee members were prepared to not only cut asset purchases but also to start raising interest rates if inflation persists.
Markets are currently pricing in at least two quarter-percentage point hikes in 2022.
The fed will update its projections on interest rates in the December meeting too.
Here at GoldCore, we have continued to see consistent flows throughout November with a noticeable increase in ticket size with a buy through rate at 80%.
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GOLD PRICES (USD, GBP & EUR – AM/ PM LBMA Fix)
01-12-2021 1786.80 1789.25 1341.89 1340.69 1577.74 1576.51
30-11-2021 1797.60 1804.40 1345.32 1350.59 1582.25 1587.33
29-11-2021 1795.00 1785.95 1344.99 1343.21 1589.83 1585.92
26-11-2021 1809.80 1800.80 1358.44 1350.78 1604.75 1594.97
25-11-2021 1790.65 1788.15 1343.88 1343.44 1595.83 1594.31
24-11-2021 1790.80 1782.05 1339.70 1336.00 1596.50 1590.48
23-11-2021 1797.30 1789.15 1344.02 1337.93 1595.82 1590.20
22-11-2021 1841.10 1816.05 1370.15 1353.68 1631.03 1613.92
19-11-2021 1861.40 1861.10 1387.30 1383.73 1647.34 1646.14
18-11-2021 1860.50 1860.30 1378.63 1381.46 1641.71 1640.78
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