24th February 2017

Following the release of the Fed minutes on Wednesday, the headline in Thursday’s Wall Street Journal read: “Fed Eyes Aggressive Rate Increases”. If that was indeed the interpretation, someone failed to tip off the gold market, which instead shot up by a hefty 1% to a 3 1/2 month high. Clearly, perceptions among gold investors were the exact opposite of what the Journal was seeing; Thursday’s action showed us that gold bugs instead assumed that the Federal Reserve will likely stand pat in March and may not move until much later. We ourselves are uncertain at this stage as to what the Fed will do and believe the central bank is undecided as well, preferring to wait for more data to come in before deciding. The Fed will have a chance to look at one more month of data on both inflation and employment before it makes its decision.