On Wednesday gold prices broke the $1,300 level, their highest since early October as election anxieties brought stocks and the dollar downward. Gold ended the day surrendering half its gains following the release of the Fed’s rate announcement and found support below the $1,300 level with lows just above $1,295.
The Fed’s delay was highly expected and is seen by many as setting the stage for a December move. The probability for an increase Wednesday came in at only 7% while the odds of a December move jumped to 74%. Also suggestive was the fact that FOMC dissenters voting for an immediate hike fell to two, down from three last month.
However, an interest rate hike in December isn’t a foregone conclusion; there’s still the US presidential election to contend with, and there’s still plenty of fear out there among investors. ‘This unbelievable election season we’re going through isn’t exactly engendering confidence,’ stated Richard Sichel, chief investment officer at Philadelphia Trust Co.
This post was published at Schiffgold on NOVEMBER 3, 2016.
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