Today’s big news item was non-news that had a major impact on gold and the NASDAQ – or at least something did! Coming into the Fed’s decision today, traders rated the odds of a ¼% interest rate increase at around 100%. So how surprised could anyone have been when the Fed raised rates by ¼%? US stocks reacted mostly in a ho-hum way, until about 2:00 in New York, when the NASDAQ once again fell out of bed. Gold was up sharply on the day following the interest rate hike, but also took a dive around 2:00.
In the case of gold, blame was laid at the feet of economic reports showing inflation lower than expected. The PCE deflator came in at 1.5%, and the CPI dropped by 0.1%; both below what the Fed wanted to see, and implying a weaker than thought economy. Oil didn’t help either, as crude prices dropped below $45/bbl., a level that is thought to ... Log in or subscribe to continue reading.