As many had anticipated the FOMC kept its policy unchanged but stated its concern regarding the still elevated unemployment. Gold and silver continued to trade down yesterday along with other commodities including oil and natural gas. Yesterday, it was reported that new home sales rose by 5.7% during September. This news, however, didn’t seem to curb the fall of commodities and stock markets. There are reports of a projected rise in demand for silver in 2013 in China. Today, $29 billion auction on seven year U.S treasuries will commence. Yields on 7-year treasuries have declined in recent days. This auction might serve as an indicator for the market sentiment. On today’s agenda: Flash GB GDP Q3 2012, U.S Core Durable Goods, U.S. Jobless Claims and Pending Home Sales.
On Wednesday, Gold declined again by 0.46% to $1,701.6; Silver also decreased by 0.54% to $31.62. During October, gold decreased by 4.08%; silver, by 8.55%.
FOMC Statement – Fed Left Policy Unchanged
Yesterday, the FOMC concluded its last meeting before the U.S Presidential elections. The Fed left its monetary policy unchanged and will continue with its plan to purchase mortgage backed securities at a pace of $40 billion per month. The Fed will keep its pledge of maintaining its short term interest rate low at least until mid-2015. the Board voiced again its concern regarding the high unemployment and the slow recovery of the housing market. Since the Fed didn’t change its policy, this news might pull back a bit the prices of silver and gold. In the past, whenever the Fed left its policy unchanged the prices of bullion tended to fall the next day. The next meeting will be held during December 11-12.
On Today’s Agenda
U.S Core Durable Goods: This report may indirectly indicate the changes in U.S. demand for commodities such as crude oil. As of August, new orders of manufactured durable goods declined by $30.1 billion to $198.5 billion; if this report will continue to show a drop in orders then it could pull down not only the US dollar but also commodities;
U.S. Jobless Claims Weekly Report: in the previous update the jobless claims rose by 46k to 388,000; this upcoming weekly update may affect the U.S dollar and consequently the rates of precious metals;
U.S. Pending Home Sales:in the recent report the pending home sales index fell by 2.6% (M-over-M). These data are another indicator for the shifts in America’s real estate market; based on last week’s results on housing starts, the pending sales may change direction and rise. In such a case US dollar may rally;
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