Yahoo Finance Gold Climbs But Cannot Following Silver’s Breakout
Gold prices moved higher but remain range bound as the dollar was strong capping upside movements in the yellow metal. Silver prices broke out but gold could not following the path of its less expensive precious metal.
Technicals
Gold prices moved higher on Wednesday bouncing at support near the 10-day moving average at 1,341. Resistance is seen near the April highs at 1,365. Momentum is positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher gold prices.
Fed Voted for a Discount Rate Hike
Fed Minutes of Board discount rate meetings from February 26 through March 21 showed 10 District banks voted for a 25 basis point hike in the primary credit rate to 2.25% at the joint Board and FOMC meeting. According to the Minutes, the 2 Banks not voting for an increase were Minnesota and Chicago, which are headed by two of the most dovish on the FOMC, president’s Kashkari and Evans, respectively. Interestingly, at the February 26 FRB meeting, 9 Banks voted to keep the rate unchanged at 2% while 3, including Philly, KC, and Dallas argued for an increase to a 2.25% rate. But by the March 12 meeting, there was a switch such that 3 banks, Atlanta, Chicago, and Minneapolis voted to maintain the 2% Discount rate, while the remaining 9 regional Banks opted for a 25 basis points hike.
Chicago Fed dove Evans sees the Fed raising rates gradually without risk or evidence of an inflation surge, while there’s no need to hike rates much above a neutral setting. He expects rates to continue to rise gradually over the next couple of years and says the economic is “firing on all cylinders,” with the job market “solid” and consumer fundamentals “quite strong.” Evans sees “forward momentum” on capital spending and fiscal policy “strongly expansionary.” While global growth is picking up at the same time, there is some uncertainty from trade. He views somewhat below target inflation as expected to improve, while there’s little risk of accelerating markedly higher inflation.
U.S. MBA mortgage market index rose
U.S. MBA mortgage market index rose 4.9% in data released earlier, accompanied by a 6.1% surge in the purchase index and a 3.5% rise in the refinancing index for the week ended April 13. The average 30-year fixed mortgage rate was flat on net at 4.66%.
This article was originally posted on FX Empire
