November 04, 2021

The metals complex is enjoying a nice recovery today after yesterday’s sell-off with gold reaching a high today above the $1,800 resistance level. 

Yesterday’s Fed announcement set in play two fundamental currents.

The widely expected Fed announcement on cutting back asset purchases while refraining from advancing the rate hike scheduled to begin in early 2023 sent equities to the upside.  The announcement of the $15B monthly reduction of the Fed’s bond purchase program was seen as mostly benign and with no increase in rates on the horizon (which can create a drag on corporate profits), equities surged to the detriment of precious metals.  However today, with no change in rate perceptions, precious metals moved to the upside as inflation looks to be lasting for the near term.