equities moved, it was not so much about the statement and dot plot, but it was all about Powell’s press conference.
The last time gold had a closing price this high was on November 5, two days after the November FOMC meeting.
On the day the November FOMC meeting concluded gold futures had opened at $1790, traded to a low of $1758, and closed at $1763, resulting in a net decline of $27.
Chart number two is a daily candlestick chart of gold futures with the conclusion of both November and December’s FOMC meeting highlighted.
In other words, each explanation for the most part is a partial explanation based upon the analyst’s vantage point.
By doing this market participants that were anticipating the first-rate hike immediately following the completion of the tapering process had to rebalance their outlook once it became clear that although the tapering process will end in March, the first-rate hike will not occur until the Federal Reserve’s mandate of full employment is met.
If last month’s move in gold is any indication of what to expect following yesterday’s last Fed meeting of the year, it could be the beginning of a decent rally.