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Fed Pauses, ECB Raises
by Alasdair MacLeod Gold Money
Gold and silver ended up little changed on the week after a sell-off in the Far East on Thursday morning, following the Fed’s decision to pause increases in interest rates. In Europe this morning gold was $1964, up $4 from last Friday’s close, and silver was $23.98, down 28 cents on the same timescale. Comex turnover in both contracts increased, indicating they were finding some support at these levels.
Gold’s action reflected speculator nervousness over how to interpret the Fed’s move, though it was as expected. The question on their minds was whether the Fed would resume its increases, having hinted that there are possibly one or two further rises to come. But the ECB’s rate increase yesterday, together with expectations of further rate increases by the Bank of England and others has undermined the dollar’s trade weighted index. This is next.