Gold, silver, and platinum are taking a breather for now, and we will have to wait for the Fed policy announcement tomorrow before looking for any direction changes. Most markets, and metals are not an exception, have already priced in a rate hike tomorrow. In fact, some are already pricing in three rate hikes from the Fed this year. Some traders are even suggesting that there could be four rate hikes this year. But let’s not get ahead of ourselves here. There is nearly 100% certainty that the Fed will increase rates tomorrow after last week’s positive employment numbers. The Fed wants to be transparent and does not want to send shock waves through the markets. They have to raise rates and they have prepared the markets for it tomorrow. However, moving forward continues to depend on whether or not the economy stays on track.

I think that the gold, silver, and platinum markets are likely basing a bottom at these levels, but a breather or pause in the selloff has to be the first step. It is certainly possible that the metals markets will catch a bounce tomorrow on a Fed rate hike, but it will be rising inflation rates that really get the metals moving higher. Inflation is coming, and for longer term strategies these are good levels for traders that want to be long in metals.


Gold Daily Chart


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Frank J. Cholly

Senior Market Strategist
Frank is a swap registered trader who brings his clients more than twenty-six years of commodity futures experience. He was a member at the Chicago Board of Trade for 10 years where he filled orders in the grain and financial pits. Frank was also a Lind-Waldock's floor manager for ten years and later joined on as a commodities broker.
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