Gold and Silver Soar on a Perceived Fed Pivot
For months, precious metals have encountered consistent downward pressure from higher interest rates, dollar strength, and higher Treasury yields. This trend has eased somewhat in recent weeks, as some have anticipated a slowdown in Fed rate hikes. Naturally, gold bugs and participants in the broader market have continually monitored key economic metrics such as inflation and employment data, along Fed speak.
All of these elements were present this week, with economic news or scheduled speaking engagements from Fed officials occurring throughout the week. Key among them being Wednesday’s speech from Fed Chair Jerome Powell, along with inflation and employment data set for release later in the week.
Gold and silver saw little price movement on Monday and Tuesday, as the pair hovered around $1,750 and $21.20, respectively. Growing demonstrations in China dented investor sentiment on Monday, as Chinese citizens protested Beijing’s authoritarian crackdown on its citizens via its zero Covid policy.
Fears of continued shutdowns in the region, drove a selloff which meant that major averages such as the Dow Jones Industrial Average and S&P 500 ended the day about 1.5% lower. Stocks in the U.S were slightly lower on Tuesday as well, as investors braced Wednesday’s address from Jerome Powell.