Precious metals swung about yesterday in the aftermath of the Fed’s decision to leave rates unchanged, and following Fed Chair Powell’s hawkish press conference. Mr Powell made the Fed’s position abundantly clear, telling investors that their expectations over the timing and size of rate cuts this year were both too soon, and too much. But gold and particularly silver have come under strong selling pressure this morning. Traders are reacting to the prospect of US interest rates staying at current levels beyond March. While US economic growth is robust, and unemployment remains low, many investors are struggling with the idea of rates at 5.50%, a level previously hit in January 2021. But back then, rates were on their way down, having peaked at 6.5% and plateaued there between May and December 2000, ahead of the Dotcom meltdown. But today, the Fed’s message has seen the dollar pick up again, putting downward pressure on dollar-denominated commodities.
Despite this uptick, the daily chart of the Dollar Index shows a market that is continuing to consolidate following a decent rally since the end of last year. Resistance comes in between 103.50 and 103.80. If it breaks above here then the next upside target is 104.20.
Despite this uptick, the daily chart of the Dollar Index shows a market that is continuing to consolidate following a decent rally since the end of last year. Resistance comes in between 103.50 and 103.80. If it breaks above here then the next upside target is 104.20.