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Chance of FED Rate Hike Strengthened

Chance of FED Rate Hike Strengthened
Category: Market Reports
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Posted: 12-04-2015 12:58:00 PM

A knee jerk reaction to the softer dollar and higher prices this morning, created some customers to sell product, some dealers have reported. 

The U.S. economy added 211,000 new jobs in November, giving the Federal Reserve confirmation that a December rate hike is in order. The unemployment rate remains at 5 percent.

February gold reached $1,070.70 overnight as the dollar weakened against the Euro. Because of the soft dollar, a short covering rally was in order, breaking gold out of its most recent trading range. The Euro is trading this morning above the 1.09 level, up from the 1.05 area earlier in the week.

The question remains, although it might not matter too much after today’s job number, what effect a rate hike will have on the gold market. The Wall Street traders I’ve polled still believe that remaining bearish is the right philosophy. In my opinion, the weakness in the dollar will cause a strong rally in gold, forcing them to rethink their positions.

A knee jerk reaction to the softer dollar and higher prices this morning, created some customers to sell product, some dealers have reported. For my friends who love charting the prices, next level of resistance is $1,079.80 and $1,087.90 in the February contract and back to the $1,050 area for support.

Silver, our shining star for 2015, continues to show that it’s hard to keep her below $14.00. Earlier in the week, we broke thru that magical number again and, with continued strong physical buying below that threshold, she just keeps bouncing back. Most dealers report silver coin sales still on top of the heap.

Platinum and Palladium as well as base metals all in the green colors this morning. It’s been quite a while since that’s been the case.

Oil prices fell below $40 per barrel this morning as OPEC members seem not to be upfront and honest on daily oil production. Even with the talk of output reductions, OPEC is unlikely to leave this meeting with any agreement on production cuts.

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About The Author

Walter Pehowich Author Name: Walter Pehowich
This editorial has been prepared by Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not prove to be true, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept the foregoing.

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