Loading ...“The Hook” – Part 2
On Monday I posted “The Hook”, explaining that NEM was the sacrificial lamb to hook investors into believing that gold and gold miners should be avoided. Having bottomed and with a decent bounce since the bottom, gold and silver began the expected two day pullback indicated by their charts, yesterday.(my count looks for the pullback to end today) The bond market was having such a strong rally (prices up and yields down) that the FED had to rollout it’s team to once again give us BS hawkish talk to reverse the bond market rally and bring down gold and silver prices.
“Hawkish comments from several Fed presidents are countering a recent narrative taking hold of financial markets, in which policymakers would ease up on a recent tightening cycle given expectations of an economic slowdown. Stocks dipped on the remarks on Tuesday, while investors sent the 10-year Treasury yield up 15 basis points to the 2.75% level. The new spate of aggressiveness also saw the safe-haven dollar renew its surge, though there was still plenty of optimism that the U.S. could achieve a soft landing and avoid a formal recession.
St. Louis’ James Bullard: “I think that inflation has come in hotter than what I would have expected during the second quarter. Now that that has happened, I think we’re going to have to go a little bit higher than what I said before.”
San Francisco’s Mary Daly: “[The Fed is] nowhere near almost done. We have made a good start and I feel really pleased with where we’ve gotten to at this point, [but] people are still struggling with the higher prices. My modal outlook, or the outlook I think is most likely, is really that we raise interest rates and then we hold them there for a while at whatever level we think is appropriate.”
Chicago’s Charles Evans: “If we don’t see improvement before too long, we might have to rethink the path a little bit higher. We want to see if the real side effects are going to start coming back in line… or if we have a lot more ahead of us.”
Cleveland’s Loretta Mester: “We have more work to do because we have not seen that turn in inflation. It’s got to be a sustained, several months of evidence that inflation has first peaked – we haven’t even seen that yet – and that it’s moving down.”
I don’t understand why Higher Interest rates are good for Gold CM
Hawkish Fed should be bad for all Markets..no ?
The FFR set by FOMC follows the market, particularly the 90d T and 180d T.
Whatever they may be doing s/t, those rates are still higher than the FFR, by ~50bpts.
So the Fed has further to go.
AND … IMO, rates are tracking energy driven CPI.
And also IMO, these are setting up to sky this winter.
Market rates will follow, in time. And FOMC will have to follow.
And yes, higher rates are NOT asset friendly, as you’ve correctly noted.
Did the 10-year already bottom at 2.52% this week?
Now back to 2.849%
Also the unemployment report is expected to be pretty nasty this Friday.
“They” generally smack gold down when “they” know the unemployment report is going to be bad otherwise it’d rise to 1830-1840 by Friday itself.
High around 1788 down to 1755, keeping PM buyers on the sidelines expecting another did to 1680-1675 area.
Guess what?
I learned a long time ago that there’s no gentleman’s entry in the PM space.
The rest of this week will be no different.
GL
Rates in the marketplace have been coming down. It is only the fed funds that is being raised by the FED. The bond market had a strong rally since before the FED hikes and continued this week until the FED trotted out the talking heads to get rates back up for a couple of days. The next news on the economy that shows continued weakness will cause the bond market to rally again and gold and silver as well. TODAY is the day to complete your gold and silver and favorite miners buying programs. I just did this morning.