{"id":57658,"date":"2022-09-21T13:56:18","date_gmt":"2022-09-21T17:56:18","guid":{"rendered":"https:\/\/www.ino.com\/blog\/?p=57658"},"modified":"2022-09-21T13:57:41","modified_gmt":"2022-09-21T17:57:41","slug":"september-fomc-meeting-how-might-gold-respond","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2022\/09\/september-fomc-meeting-how-might-gold-respond\/","title":{"rendered":"September FOMC Meeting - How Might Gold Respond"},"content":{"rendered":"

The Federal Reserve will conclude its September FOMC meeting and release a written statement at 2 PM EDT today. This will be followed by Chairman Powell\u2019s press conference a half-hour later. <\/p>\n

It is widely anticipated that the Federal Reserve will raise the \u201cFed funds rate\u201d by 75 basis points. The CME\u2019s FedWatch tool is forecasting that there is an 84% probability of a 75-basis point hike, and a 16% probability that the Fed will raise rates by a full percentage point.<\/p>\n

In the unlikely event that the Federal Reserve raises its benchmark interest rate by 1%, it would most certainly pressure gold to lower pricing. <\/p>\n

<\/div>\n

According to MarketWatch, \u201ceconomists at the brokerage Nomura Securities \u2026 became the first on Wall Street to predict a full-percentage-point increase in the Fed\u2019s benchmark short-term rate.\u201d<\/p>\n

\"Weekly<\/a><\/p>\n

However, if the Fed raises rates by 75 basis points as expected market participants could see some short-covering activity amid a relief rally. As of 5:05 PM EDT yesterday gold futures basis, the most active December contract is trading five dollars lower and is fixed at $1673.20.<\/p>\n

The hard truth is that after four consecutive rate hikes beginning in March inflation remains extremely elevated and persistent. The latest data revealed that the CPI index had a slight decline from July\u2019s 8.5% to 8.3% in August. While the headline CPI had a fractional decline the core CPI which strips out food and energy costs increased 0.6% more than double the prior month\u2019s increase. This means that the core inflation rate climbed to 6.3% from 5.9% in August.<\/p>\n

Because the August core inflation rate is three times the 2% target the Federal Reserve wants to achieve members of the Federal Reserve will continue the exceedingly hawkish tone expressed at the Jackson Hole economic symposium.<\/p>\n

Based on the hot and persistent core inflation participants can expect to see interest rates continue to rise during the remaining three FOMC meetings in September, November, and December. The CME\u2019s FedWatch tool is forecasting that there is a 38.9% probability that the Fed will raise rates to between 400 and 425 basis points and a 44.8% probability that rates will be between 425 and 450 basis points by December 2022.<\/p>\n

<\/div>\n

Interest rate hikes that began in March were the primary fundamental events that resulted in a major price decline in gold. After four consecutive interest rate hikes gold has declined by approximately 19% or $400 per ounce.<\/p>\n

In his speech last month Jerome Powell acknowledged the severe fallout of reducing inflation. \u201cThe Fed's drive to curb inflation by aggressively raising interest rates would bring some pain.\u201d<\/p>\n

For those who would like more information simply use this link<\/a><\/strong>.<\/p>\n

Wishing you as always good trading and good health,
\nGary S. Wagner
\nThe Gold Forecast<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Federal Reserve will conclude its September FOMC meeting and release a written statement at 2 PM EDT today. This will be followed by Chairman Powell\u2019s press conference a half-hour later. It is widely anticipated that the Federal Reserve will raise the \u201cFed funds rate\u201d by 75 basis points. The CME\u2019s FedWatch tool is forecasting […]<\/p>\n","protected":false},"author":41,"featured_media":56756,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6920],"tags":[31829,3270,7787,31705],"class_list":["post-57658","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ino-com-contributors","tag-fomc-meeting","tag-gary-s-wagner","tag-interest-rate-hikes","tag-the-gold-forecast"],"yoast_head":"\nSeptember FOMC Meeting - How Might Gold Respond - INO.com Trader's Blog<\/title>\n<meta name=\"description\" content=\"The Federal Reserve will conclude its September FOMC meeting and release a written statement at 2 PM EDT today.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ino.com\/blog\/2022\/09\/september-fomc-meeting-how-might-gold-respond\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"September FOMC Meeting - How Might Gold Respond - INO.com Trader's Blog\" \/>\n<meta property=\"og:description\" content=\"The Federal Reserve will conclude its September FOMC meeting and release a written statement at 2 PM EDT today.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.ino.com\/blog\/2022\/09\/september-fomc-meeting-how-might-gold-respond\/\" \/>\n<meta property=\"og:site_name\" content=\"INO.com Trader's Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/inocom\/\" \/>\n<meta property=\"article:published_time\" content=\"2022-09-21T17:56:18+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-09-21T17:57:41+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.ino.com\/blog\/wp-content\/uploads\/2022\/04\/Fed.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"628\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"The INO.com Team\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"The INO.com Team\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.ino.com\/blog\/2022\/09\/september-fomc-meeting-how-might-gold-respond\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.ino.com\/blog\/2022\/09\/september-fomc-meeting-how-might-gold-respond\/\"},\"author\":{\"name\":\"The INO.com Team\",\"@id\":\"https:\/\/www.ino.com\/blog\/#\/schema\/person\/d86a8cce826b7bd105200d88bb28a280\"},\"headline\":\"September FOMC Meeting - How Might Gold Respond\",\"datePublished\":\"2022-09-21T17:56:18+00:00\",\"dateModified\":\"2022-09-21T17:57:41+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.ino.com\/blog\/2022\/09\/september-fomc-meeting-how-might-gold-respond\/\"},\"wordCount\":447,\"commentCount\":1,\"publisher\":{\"@id\":\"https:\/\/www.ino.com\/blog\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.ino.com\/blog\/2022\/09\/september-fomc-meeting-how-might-gold-respond\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/wwwtest.ino.com\/blog\/wp-content\/uploads\/2022\/04\/Fed.jpg\",\"keywords\":[\"FOMC Meeting\",\"Gary S. 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