Is The Powell Pop In PMs A Prelude To A 2018-2019 Scenario?
Craig Hemke, Editor of TF Metals Report, joins us to review the recent pop in the precious metals on the back of Jerome Powell’s press conference yesterday, and points out the similarities to 2018-2019 when the expectations and messaging were for the Fed to keep hiking aggressively, only for them to pause, pivot, and start cutting rates in mid 2019. We noted that Powell is simply doing what he said was the trajectory back at the September meeting, but markets interpreted his comments yesterday as having more of a dovish tone and signaling moderating the pace of the rate hikes starting December.
Craig also points out that with this recent rally in both gold and silver, that they are quite close to taking out their 2021 annual closes at $1829 and $23.38 respectively. Making a new annual closing high in 2022 is not something most market participants or technicians have been calling for, but it is in the realm of possibilities at this point. Another potential mover could be China starting to open it’s economy back up in 2023, and that could be a tailwind for the commodities and PMs. We wrap up discussing whether a rebound in the US dollar or interest rates, could end up reversing the recent uptrend in most markets, as well as looking forward at the jobs report tomorrow.