The financial market's attention is firmly on the upcoming Federal Reserve's policy meeting, with its potential implications for gold prices, silver, and the Canadian dollar. As per the CME’s FedWatch Tool, the prevailing consensus anticipates that the Fed will maintain the current interest rates, with a one-in-three chance of another rate hike before 2024 ends.
This week, real Treasury yields have remained at higher levels, reflecting the market's collective prediction of a hawkish yet non-active approach from the Fed. This has led to a restrained outlook on gold. According to NAB Commodities Research, gold prices might face a downward push if the Federal Reserve adopts a tougher stance. The ongoing scenario suggests a potential consolidation for spot gold prices within the $1,900 to $1,890 range.
Similarly, the silver market is also focused on the Federal Reserve meeting. The broader financial sector expects unchanged rates post this meeting, yet there is a 35% probability of another rate increment before 2024 concludes. The key element in this unfolding scenario will be insights from Fed Chair Jerome Powell’s press conference.
The Canadian dollar saw a surge this Wednesday due to hotter-than-predicted inflation figures, reaching its strongest position since August 10th. Despite this boost, speculators have heightened their pessimistic outlook on the Canadian dollar as per U.S. Commodity Futures Trading Commission data. The likelihood of the Bank of Canada introducing a rate hike in October has almost doubled following the inflation report.
In addition to interest rates, the Federal Reserve’s quarterly economic outlook is likely to provide insights into GDP, unemployment, and inflation trends. Despite concerns over rate hikes potentially leading to an economic slowdown, Fed officials have not completely ruled out additional hikes.
With Wall Street in a holding pattern ahead of the Federal Reserve’s policy reveal, the prevailing market sentiment is cautiously optimistic. The market’s resilience is underpinned by strong earnings, which currently appear to be overshadowing other narratives, including inflation concerns.
In the commodities market, West Texas Intermediate Crude oil futures are down $0.68 or 0.72% at $90.52 a barrel. Gold futures are down $1.30 or 0.07% at $1,952.40 an ounce, while Silver futures are gaining $0.094 or 0.4% at $23.550 an ounce.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.