Welcome to SurvivalBlog’s Precious Metals Month in Review, where we take a look at “the month that was” in precious metals. Each month, we cover gold’s performance, and the factors that affected gold prices.
What Did Gold Do in November
Gold started the month around $1,640 an ounce. After dipping slightly to $1,630, prices powered $145 higher to the $1,775 area, leaving the $1,685 support level in the dust. Prices leaked lower in the third week of November, but held above the $1735 support line that signifies the floor gold must respect to signal a new short-term bull run. Prices regained lost ground to end the month above $1,770 an ounce.
Factors Affecting Gold This Month
THE FED
The Fed continued to call the shots in November. Markets took solace in an apparent change in trajectory for future rate hikes. Fed officials have signaled that next month’s rate hike with be 50 basis points instead of 75 bp, with markets presuming that the same will hold true in February.
The Fed tempered the good news by telegraphing that the top interest rate will be near 5% instead of the 4.5% – 4.75% previously targeted. St. Louis Fed president James Bullard had a more hawkish prognostication, of course. He stated that interest rates would have to be higher than 5%, perhaps up to 7%, in order to stop stubbornly high inflation.
DOLLAR
The dollar lost some of its power in November, as easing inflation numbers softened Fed rate hike rhetoric. The greenback had its worst day since 2009 on November 10th, after US CPI was reported to have only risen 7.7%, down from 8.2% and lower than projections of 7.9%. Gold shot $40 higher, and the Dow closed an amazing 1,200 points higher.
The greenback failed to reassurt its dominance for the rest of the month, allowing the euro to return to above parity, and helping gold prices in other currencies.
INFLATION / RECESSION
Europe is also starting to see the first tiny signs that inflation may be topping out. Composite EU CPI showed a larger than expected drop to 10.0%, down from 10.6%. This fueled hopes that the ECB might hike rates less than previously expected at their next meeting. Energy and food shortages will keep prices high and economies faltering, however, miring the region in stagflation.Continue reading“November 2022 in Precious Metals, by Steven Cochran”