Gold has been underpinned by a weaker U.S. dollar, as well as weakness in global stocks after a Federal Open Market Committee meeting concluded Wednesday, says George Gero, managing director with RBC Wealth Management. With the Fed meeting out of the way, the market is “back to basics of economics, politics, U.S. budgets, worries about Brexit and euro zone and emerging countries, [and] forecasts for growth,” Gero says. “Gold prices may reflect soon effects of buying from asset allocators [and] haven seekers who have taken large exits from equity assets.” Just before 9 a.m. EST, Comex December gold was $3.70 higher to $1,259.90 an ounce. The spot dollar index was down 0.654 point to 95.830. U.S. stocks fell late Wednesday, and global equities followed overnight.

By Allen Sykora of Kitco News; [email protected]

Commerzbank: Swiss Data Show Asian Gold Buying Picks Up

Thursday December 20, 2018 09:09

Not only has exchange-traded fund buying of gold picked up, but Swiss customs data shows Asian buying has improved as well, says Commerzbank. “As the Swiss Federal Customs Administration reported this morning, Switzerland exported considerably more gold again in November, especially to Asia,” the bank says. “Gold exports to India nearly tripled month-on-month, while exports to China and Hong Kong soared by just shy of 60%.”

By Allen Sykora of Kitco News; [email protected]

BBH: Fed Not As Dovish As Markets Were Expecting

Thursday December 20, 2018 09:09

The Federal Reserve’s policy statement Wednesday was not as dovish as markets expected, says Brown Brothers Harriman. Policymakers hiked rates again by 25 basis points, as expected. The statement and Fed communications were scrutinized for clues of whether the Fed would slow down its monetary tightening in the months ahead. There was a dovish shift in the so-called “dot-plots” showing expectations on rates in the future from individual policymakers, but   “the overall message was clearly not as dovish as markets were expecting,” BBH says. “[Fed Chair Jerome] Powell said balance-sheet reduction is on auto-pilot, dashing the hopes of some that were hoping for some flexibility.  Most importantly, Powell seemed to put little weight on recent equity market movements, supporting our view that there simply is no ‘Powell put.’” Global equities sank afterward and overnight. “Despite Powell’s upbeat view on the economy, markets are saying that they think the Fed is making a mistake,” BBH says. “That is, the Fed (and by extension us too) is too upbeat on the economy and so will continue to hike and likely push the U.S. economy into recession.”