Gold Markets Hinge on Upcoming Fed Decision

APMEX

12/17/2018 1:18:02 PM

Daily Gold & Silver Market Report – 12/17/2018

• Gold prices lift ahead of Federal Reserve meeting.
• Silver, Platinum and Palladium trade higher Monday. 
• November U.S. housing data could also influence spot prices.

This week is expected to be pivotal for Gold prices, as many market watchers wait patiently for announcements from the U.S. Federal Reserve. Many economists have forecast that the central bank will raise interest rates one more time this year. An Investing.com report suggests if this prediction comes true, small gains for the U.S. dollar will likely follow. However, if no change is made to interest rates, Gold could become an essential asset for those looking to hedge against a looming economic slowdown. Some reports have even called Gold a potential “savior” in the face of a new recession.  

Precious Metals investors are keeping part of their focus on U.S. housing numbers, expected Tuesday. The effect of ongoing Brexit negotiations on the euro and the British pound could also have an impact on U.S. dollar value and, in turn, Gold prices.

Gold Prices Rise Ahead of Final 2018 Fed Meeting

Gold prices rose Monday morning as the U.S. dollar lost traction against other major world currencies. Around the world, many stocks saw losses contributing to increased interest in safe-haven investments such as bullion. All this comes as the U.S. Federal Reserve plans for a two-day meeting, which is likely to end in an announcement that interest rates will increase once again in 2018. No matter the outcome, CNBC points out that later this week, investors will shift their focus squarely on the central bank’s policy expectations for next year. An analyst observed that while safety is a significant driver of the new interest it Gold, a U.S. dollar is also experiencing a sell-off. If the Fed does not raise interest rates as has been widely predicted, there is a chance Precious Metals prices will see growth.
Silver, Platinum and Palladium were also trading higher Monday morning. Last week, world equity markets reached a 17-month low amid concerns that the global economy is slowing down. Other areas of the market are also skittish about the potential of a U.S. government shutdown. Analysts from BMO Capital Markets told CNBC in a note, “With increased volatility and geopolitical risk, macro asset allocation is becoming more Gold-positive again, while we believe much of the dollar's upward move is now behind us with rate hike expectations dropping.”

At 1:12 p.m. (ET), the APMEX Gold and Silver spot prices were:

• Gold, $1,249.80 Up $9.60
• Silver, $14.78 Up $0.13
• Platinum, $799.40 Up $11.10
• Palladium, $1,259.70 Up $15.10

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