Price of Gold Escalates As Fed Decision Draws Near

APMEX

12/19/2018 11:27:38 AM

Daily Gold & Silver Market Report – 12/19/2018

• Price of Gold increases ahead of Fed announcement.
• Bank of Japan and Bank of England meet this week to decide interest rate policy.
• Bitcoin benefits from a three-day rally.

Spot prices for Gold crawled up Wednesday morning toward some of the best rates in almost six months. A weakened U.S. dollar fueled this strength as markets wait for the Federal Reserve's last monetary policy decisions of the year. According to MarketWatch, the Federal Open Market Committee is expected to release the policy statement and new projections regarding interest rate increases at 2 p.m. (ET) followed by a news conference with Fed Chair Jerome Powell. Futures for Gold bullion were also trading up Wednesday morning. Palladium continued to trade higher than Gold on Wednesday morning while Silver and Platinum were also up.

Many investors on Wall Street anticipate a rate increase followed by indications that future increases will be more conscientious. A previous projection from the Fed regarding 2019 interest rate hikes suggested three increases. But as markets have changed, many are open to the possibility that this number could be reduced. Growing interest rates are known to be a challenge to Precious Metals markets more so that assets that offer a yield.

Markets Await Announcements from Three Major Central Banks

Three of the world’s most influential central banks meet this week, potentially releasing policy decisions that could affect all markets. The U.S. Federal Reserve began discussions Tuesday that will result in a decision about a final interest rate hike this year. Earlier this year, many economists were confident a fourth increase would be confirmed, but FX Empire observes confidence has recently wavered.

The Bank of Japan convenes Thursday to discuss interest rate policies, which will have a direct impact on the strength of the yen. The BOJ is expected to take a cautious approach at this time. The Bank of England also begins meetings Thursday, though they are not likely to increase British interest rates at this time. The outcomes of all three conferences will significantly affect the U.S. dollar index, which has a direct relationship with Precious Metals prices, as bullion is a dollar-denominated asset.

Bitcoin Rally Leads to 10 Percent Gain

The largest, most talked-about cryptocurrency in the world, Bitcoin, rallied this week, trading above $3,800 Wednesday morning. This climb comes after a difficult year for Bitcoin, which declined 72 percent since January, according to CNBC. In the last three days, the crypto gained 22 percent. This newfound support is likely energized by eased sentiments from concerned retail investors and hope new regulation will finally bring stability to the world of Bitcoin trading.

At 12:07 p.m. (ET), the APMEX Gold and Silver spot prices were:

• Gold, $1,257.86 Up $5.20
• Silver, $14.90 Up $0.18
• Platinum, $801.40 Up $3.60
• Palladium, $1,283.20 Up $27.00

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