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U.S. Dollar Index Has Called the Fed’s Bluff on Interest Rates
Investors May Err by Waiting for Official Word from the Fed on End to Rate Hikes
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Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
Precious metals markets are rallying strongly this week on dovish signals from central bankers.
Federal Reserve Chairman Jay Powell said in a statement that the Fed would "moderate" the pace of rate hikes. Investors interpreted that term as a sign that monetary policy is moving in a more dovish direction.
Of course, Fed officials insist they are still engaged in the fight against inflation and plan to continue hiking interest rates – albeit in smaller sizes. Even though the Fed isn’t quite finished yet with raising rates, the U.S. dollar’s exchange rate is already telling a different story.
The U.S. Dollar Index fell to a five-month low on Thursday. That helped propel metals markets sharply higher.
As of this Friday recording, gold is pulling back a bit here today and is posting a weekly gain of 1.9% now to bring spot prices to $1,797 per ounce.
Silver, meanwhile, is surging nearly $1.50 or 6.9% for the week to trade at $23.15 an ounce. That puts silver at its highest level since April and represents what is shaping up to be a big technical breakout.
Turning to the platinum group metals, platinum is advancing 3.3% since last Friday’s close to trade at $1,025. And finally, palladium is putting in a weekly gain of 0.9% to come in at $1,936 per ounce.
The stock market also rallied on Wednesday and Thursday when it realized Federal Reserve Chairman Powell is losing his nerve to continue aggressive rate hikes.
The Fed is nervously eyeing the housing market downturn, and tightening financial conditions have increased the risk of more financial accidents in the aftermath of last month's FTX and crypto industry blowup.
As we have noted previously, though, investors who sit on the sidelines waiting for an official announcement from the Fed that they are outright ending rate hikes will miss out on some significant prices moves. Gold and silver markets are moving even though the Fed keeps hiking.
By this time next year, central bankers could be frantically cutting to try to rescue the economy from recession. At that point, gold could be trading at a new all-time high.
Although it’s no longer possible to buy gold or silver at their cheapest levels of the year, the metals still represent good relative value. And there is no substitute at any price for the wealth protection characteristics of precious metals.
The good news for those looking to obtain physical bullion is that popular products are available for low premiums without delay. Across the retail bullion market, supply constraints have eased in recent weeks and premiums are coming down.
If you’re looking for affordable bullion gifts that come ready to give, you’ll want to order a handful of our holiday-enhanced gold coins. We are pleased to offer 1/10th ounce Gold American Eagles in “Merry Christmas” capsules.
These gleaming precious metals coins are a great alternative to cash, gift cards, or other run-of-the mill presents.
Those looking to impress with wearable gold should take a look at our 24-karat jewelry. These items ship in gift style box with a certificate of authenticity. And they cost much less than anything comparable you’d find at a typical jewelry store.
In addition to the widely popular one-ounce gold bracelet, we also have a full line of gold and platinum jewelry.
Meanwhile, a fun way to give the gift of silver is with Silver Building Blocks. Our Variety Pack of stackable silver building blocks contains 40 beautiful, pure silver Lego-style bars in 4 different sizes. These bars hearken back to a favorite childhood toy.
Serious silver bugs will surely appreciate finding a silver statue under the Christmas tree. Our selection of Silver Statues includes Lady Liberty, a Rifleman, a soaring eagle, a U.S. President named Trump, and even a Tyrannosaurus Rex, just to name a few!
Precious metal in any form is virtually guaranteed to bring bigger smiles to people’s faces than the equivalent value represented in paper or plastic.
There is nothing like the timeless beauty and tangible weight of a bullion product. It leaves a lasting memory and will last a lifetime.
The gift of precious metal can be cherished for years or even decades to come. It can help teach children about the value of money, the risks of inflation, and the long-term benefits of saving.
Unlike other popular gifts such as clothing or electronics that will eventually wear out or become obsolete, any quantity of precious metal stands to become more, not less valuable over time.
And speaking of Goldbacks, everyone who orders $200 or more from Money Metals still gets a free Goldback added to their order.
To ensure timely delivery, though, please place your order soon. Bullion buying has been unusually strong this year.
As we work hard to process high order volumes, some products may have slight delays in getting out. And due to staffing shortages at the Postal Service and other shipping providers, delivery times could be extended heading into the Christmas rush.
Well, that will do it for this week. Be sure to check back next Friday for our next Weekly Market Wrap Podcast. Until then this has been Mike Gleason with Money Metals Exchange, thanks for listening and have a great weekend everybody.