“Ignore The Noise” & Focus On The Fact That Central Banks “Remain Extremely Accommodative”

The primary focus this week is again on the “all powerful” Fed. If the Fed leans toward a rate hike in December, gold could come under pressure again in the short term. However, if it leans toward raising rates next year, then gold would be expected to eke out further gains.

Bank of England – Interest Rates – 1694 to Today

Most physical buyers will ignore the noise and focus on the fact that the Fed’s monetary policies, along with the Bank of England, the ECB and most central banks in the world, remains extremely accommodative.

The perception and narrative is that a rise in rates, even by a very marginal 25 basis points will be negative for gold. This may be true in the short term as perception, even misguided perception, can drive markets in the short term.

However, rising interest rates per se are not negative for gold. What is negative is positive real interest rates and yields above the rate of inflation. This is unlikely to be seen any time soon.

Gold will also be vulnerable towards the end of an interest rate tightening cycle as was the case in January 1980. Today, central banks including the Fed are having difficulty raising interest rates in even a small nominal way.

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DAILY PRICES
Today’s Gold Prices: USD 1171.50, EUR 1058.98 and GBP 765.94 per ounce.
Yesterday’s Gold Prices: USD 1165.74, EUR 1054.55 and GBP 759.52 per ounce.
(LBMA AM)

Gold in GBP – 1 Month

Gold closed at $1166.40 yesterday, a gain of $2.70 for the day. Silver was also up slightly yesterday, by $0.02 closing at $15.88. Platinum lost $9 to $984.
Gold has retained small overnight gains today ahead of a Federal Reserve policy statement later in the session as investors wait for more clues on the timing of a potential U.S. rate hike.

IMPORTANT NEWS
“Ignore the noise” & “focus on the fact” that Fed “remains extremely accommodative ” said GoldCore – MarketWatch
Gold demand rises in third-quarter on surge in coin, bar buying: GFMS – Reuters
China adds more gold to reserves in September – Reuters
Gold Little Changed as Traders Await Fed Decision on U.S. Rates – Bloomberg
China Gold Imports Climb on Pre-Holiday Buying, Lower Prices – Bloomberg

IMPORTANT ANALYSIS
Inside the Secretive Circle That Rules a $14 Trillion Market – Bloomberg
Cracking the vault – The Economist
US Dollar Valued In Gold Since 1718 – 24h Gold
Doug Casey Answers Five of Today’s Biggest Investment Questions – GoldSeek.com
China’s global power masterclass – MoneyWeek

Read More News & Commentary on GoldCore.com