Gold Spot Price Open: $1,239
Gold Spot Price Close: $1,239
Change in Gold Spot Price: NO CHANGE
Silver Spot Price Open: $18.07
Silver Spot Price Close: $17.98
Change in Silver Spot Price: -$0.09
Precious metals continued to move sideways to slightly lower on Wednesday as investors awaited some rate hike clues from January’s FOMC minutes. When all was said and done, gold lost a few dollars before ending the day unchanged while silver was down by about 9 cents. Platinum and palladium both also finished the day not too far from where they began it.
FOMC Seems Comfortable with Rate Hikes
The big news of the day came in the form of the highly anticipated release of the minutes from the FOMC’s latest meeting. At the end of the day, however, markets really did not react to the minutes. Precious metals saw profit-taking force them marginally lower, but other than that, the reaction was muted.
When the minutes from the January 31st-February 1st meeting were released, the only thing surprising was the number of folks who were comfortable with raising rates sooner than June or July. According to the minutes, members of the FOMC signaled that they support rate hikes happening in the near future should inflation and employment data remain as upbeat as it has been in recent months.
Another takeaway from the minutes was concerns voiced by some members over the wording of rate hike talk. There is a fear that the word “gradual,” when used to describe how rates would be hiked, might be being interpreted incorrectly. In using this word, the FOMC is afraid that people are anticipating only one rate hike this year, when in reality we may see as many as 3.
Finally, the last takeaway was with regard to March’s FOMC meeting. Even though most investors are not anticipating that rates will be raised in March, the minutes made it clear that a rate hike in March is not being discounted. With the comfortability level of most Fed members as it relates to the strength of the US economy, it really would not be shocking to see rates hiked at next month’s meeting. Even despite this, the minutes were mostly overlooked by investors as precious metals spot values offered very little reaction. Stocks ended the day mixed while the USD was mostly stronger.
Profit-Taking Pushes Metals Downward
After an impressive run that has lasted throughout the whole of February, precious metals are finally seeing some profit-taking drive spot values lower. With that being said, today’s losses are very small and not doing much to unnerve the investing population.
The reason for this is due to the persistence of safe-haven demand. With so many investors unsure of what the future holds for the US under President Trump, it would be a surprise to almost no one if spot values remained where they are or higher for the foreseeable future. If you add into that the uncertainty that is the future of French politics, it is easy to see why safe-haven demand is driving spot values higher almost every week. We will continue to keep a close eye on both France and the actions of President Trump, but it does not seem like safe-haven demand is going anywhere in a hurry.
Wrap-Up
All things considered, Wednesday was much more of a lackluster day than anyone anticipated. The FOMC minutes were mostly a miss because even though the Fed seems comfortable with rate hikes, they are also in no hurry to push rates higher. The reluctance on the part of the FOMC is causing investors to not be overly concerned with what the future holds for rate hikes. Other than the FOMC minutes, there were not many fresh talking points presented on Wednesday. The positive out of all of this is that precious metals are hanging tough despite very little in the way of fresh, bullish inputs.
