Fed watchers were not disappointed today as they announced an interest rate increase of 0.25% and softened their language concerning further increases. The new language leaves open the possibility that rate hikes may pause pending the results of upcoming data releases. Wall Street consensus is that rates will actually be lowered before year end; in any event, the period of automatic rate hikes is essentially over.
As of this moment, gold and silver have responded well to the news of sticky inflation. For the week, gold is up 2.27% to $1,975, and silver is up 5.6% to $23.25. Platinum is also up 2.88% to $1,000, while palladium was down a fraction to $1,490.
Since a year ago today, gold is up 2.8%, silver is down 6.2%, platinum is off 3%, and palladium is down 40%.
Gold futures reached $2,000 on March 20th, with some analysts projecting $8,000 gold in this decade. There are a variety of reasons why this may occur, but most of them involve inflation reducing the purchasing power of our dollars.
Russia has resumed gold purchases, adding 1 million ounces, or 31 tons, to their reserves. We should probably consider adding as well.