From Chris Mullen at GoldSeek.com...
Gold Prices dropped early Tuesday to find about 0.5% losses as low as $803.50 in London, but the Gold Market then steadily moved higher for the rest of trade and ended near its high of $813.50 with a gain of 0.5%.
The Gold Price then sank by $15 when the Federal Reserve cut both its main and discount interest rates by 0.25% as widely expected, suggesting that gold traders – along with one Fed member cited in the accompanying statement – were looking for a cut of 0.5%.
Silver dropped to $14.52 by early trade in New York before it rallied to as high as $14.76 by early afternoon. In reaction to the Fed’s statement, which still pointed to inflation risks as well as economic growth, it too traded more than 1.5% lower in after hours access trade.
The Gold Price in Euros rose to about €552, platinum gained $2 to $1462, palladium gained $1 to $344, and copper remained at about $3.02.
Gold and silver equities rose to find about 1.5% gains before the Fed’s statement, immediately fell back to unchanged following the announcement, and then fell even further in the last hour and a half of trade to close with about 3% losses.
Wednesday at 12:30 GMT brings US Export and Import Prices for November and the Trade Balance for October expected at -$57.0 billion. At 18:00 GMT is the Treasury Budget for November expected at -$90.0 billion.
Oil on Tuesday rose over $2 to back above $90 despite the Fed’s hawkish statement as a winter storm impacting much of the US created multiple supply problems ahead of Wednesday’s inventory reports.
The US Dollar index ended slightly higher after the fed’s statement that was more hawkish than most expected.
Treasuries rose slightly before the Fed’s statement and rose even more after it on a flight to safety.
The Dow, Nasdaq, and S&P traded on either side of unchanged in a rather tight range leading up to the fed’s statement and actually came into the statement at new session highs with nearly 0.5% gains, but all three indices then sold off markedly and ended with over 2% losses.
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