Tuesday, March 28, 2006
FOMC Raises; China Eclipses Japan: Updated
The metals market is reacting to the Fed decision. "Gold futures lost more ground in electronic trading after the Federal Reserve raised interest rates by a quarter percentage point to 4.75% Tuesday. The move was widely expected by Wall Street."
"On Tuesday afternoon, shortly after regular metals-futures trading on the New York Mercantile Exchange ended, the Federal Open Market Committee increased its target for overnight interest rates by a quarter-percentage point to 4.75%, marking its 15th straight meeting with a quarter-point rate hike. The Fed also left the door open for further increases. In recent electronic trading, gold for June delivery fell to a low of $567.80 an ounce and was last down $4.20 at $568. April gold fell $4.40 to $562.60."
"During Tuesday's regular session, June gold climbed as high as $575 an ounce, a level not seen since March 3. It closed the day at $572.20 on the New York Mercantile Exchange, down 40 cents. April gold closed at $567, also losing 40 cents for the session. May silver rallied as high as $10.94 an ounce in Tuesday's regular to match Monday's high before pulling back. The contract closed down 2.5 cents at $10.87 an ounce."
"Some weakness Tuesday in the U.S. dollar put a floor under prices for the precious metals. 'The U.S. dollar is putting in a massive top and is primed and ready for a big fall,' said Peter Grandich. 'Such a move can only add to the many bullish factors already underpinning gold.'"
"Also in Tuesday's regular session, April platinum tacked on $5.80 to close at $1,074.30 an ounce, while June palladium fell 55 cents to end at $342.25 an ounce."
"The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at the CNY 8.0206 level in the over-the-counter market, down from CNY 8.0214 and the pair’s weakest closing price after the yuan revaluation of 21 July 2005. In the exchange-traded market, the pair closed at CNY 8.0215."
"The big story in China today was a report from People’s Bank of China confirming China now boasts the world’s largest foreign exchange reserves portfolio. As of the end of February, China’s FX reserves were around US$ 853.7 billion, eclipsing Japan by some US$ 3.6 billion."
"On Tuesday afternoon, shortly after regular metals-futures trading on the New York Mercantile Exchange ended, the Federal Open Market Committee increased its target for overnight interest rates by a quarter-percentage point to 4.75%, marking its 15th straight meeting with a quarter-point rate hike. The Fed also left the door open for further increases. In recent electronic trading, gold for June delivery fell to a low of $567.80 an ounce and was last down $4.20 at $568. April gold fell $4.40 to $562.60."
"During Tuesday's regular session, June gold climbed as high as $575 an ounce, a level not seen since March 3. It closed the day at $572.20 on the New York Mercantile Exchange, down 40 cents. April gold closed at $567, also losing 40 cents for the session. May silver rallied as high as $10.94 an ounce in Tuesday's regular to match Monday's high before pulling back. The contract closed down 2.5 cents at $10.87 an ounce."
"Some weakness Tuesday in the U.S. dollar put a floor under prices for the precious metals. 'The U.S. dollar is putting in a massive top and is primed and ready for a big fall,' said Peter Grandich. 'Such a move can only add to the many bullish factors already underpinning gold.'"
"Also in Tuesday's regular session, April platinum tacked on $5.80 to close at $1,074.30 an ounce, while June palladium fell 55 cents to end at $342.25 an ounce."
"The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at the CNY 8.0206 level in the over-the-counter market, down from CNY 8.0214 and the pair’s weakest closing price after the yuan revaluation of 21 July 2005. In the exchange-traded market, the pair closed at CNY 8.0215."
"The big story in China today was a report from People’s Bank of China confirming China now boasts the world’s largest foreign exchange reserves portfolio. As of the end of February, China’s FX reserves were around US$ 853.7 billion, eclipsing Japan by some US$ 3.6 billion."
# posted by Ben Jones @ 11:39 AM 
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"Gold futures lost more ground in electronic trading after the Federal Reserve raised interest rates by a quarter percentage point to 4.75% Tuesday. The move was widely expected by Wall Street."
If it was expected, the market should have discounted it already. I expect yesterday's dump in stocks and gold was a fake-out intended to suck in bears before today's punishment rally. These "rate hikes" are so much hot air. The credit spigots remain wide open.
(This analysis, at least to the extent that it's correct, comes from what I've learned from the wise people over at www.wallstreetexaminer.com.)
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If it was expected, the market should have discounted it already. I expect yesterday's dump in stocks and gold was a fake-out intended to suck in bears before today's punishment rally. These "rate hikes" are so much hot air. The credit spigots remain wide open.
(This analysis, at least to the extent that it's correct, comes from what I've learned from the wise people over at www.wallstreetexaminer.com.)
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