As expected the Fed left rates unchanged and the accompanying statement did little to surprise investors. The doveish tone continues as the Fed says the economy has strengthened and inflation effects are likely transitory. The Fed says indicators of economic activity are improving and employment has strengthened but says sectors most affected by the pandemic remain weak but have shown improvement.
The outlook for gold deteriorated during the second half of yesterday’s trading as copper gave up some of its gains while long-dated Treasuries plunged. And overnight, gold felt obliged to fill the void, and went $10 down. The situation is far from bleak – gold is nibbling at the bearish gap, but it’s the miners that are providing more than a glimmer of hope.
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