Money and Metals

Reuters looks at the market mood before the Fed decision. "The Canadian dollar barely budged versus the greenback for a third straight day on Wednesday, while bonds edged lower as a nervous market continued to sit on its hand ahead of Thursday's U.S. Federal Reserve interest rate announcement. The currency has traded sluggishly all week as market players ponder whether the Fed will raise rates by a quarter or half percentage point, and to what extent inflation fears will prompt it to issue a hawkish statement."

"'We haven't gone anywhere of any significance since last Friday. The market's basically trapped in this trading range, and I don't think it's going to be any more exciting until tomorrow, when we get some direction from the Fed,' said George Davis, chief technical strategist at RBC Capital Markets."

The Associated Press. "Slight moves in the U.S. dollar and euro lead to a lower close Wednesday for gold and silver. The benchmark August gold contract settled $3.40 lower at $581 a troy ounce. During the session, the contract moved to a $589.40 an ounce session high but was unable to hold that level as the dollar rose against the euro. August gold later dipped to a $579.10 an ounce low."

"July silver backed off of earlier gains to settle at $10.155 an ounce, down 4 cents on the day. July platinum settled $10.10 lower at $1,178.20 an ounce while September palladium settled down $1.40 at $312.80 an ounce."

From Bloomberg. "'I'm looking for gold to take a dip after the Fed raises rates,' said Mike Sander, a commodity broker. 'The Fed is most likely to increase the value of the dollar.'"

"Interest-rate futures indicate an 83 percent chance of another quarter-point increase in rate in early August. That was up from zero percent at the start of the month."

"'A lot depends on market perception,' said Jim Pogoda, an investor and a former precious-metals trader for Mitsubishi Ltd. 'If the markets feel the Fed has or will overdo rate rises, then the dollar should rise and pressure gold lower. If the markets feel the Fed is behind the curve and losing credibility to contain inflation, then gold should benefit.'"