2nd February 2017

 Gold erased roughly $9/ ounce of losses over the course of Wednesday’s session to finish roughly unchanged, but we were rather surprised by its rather muted performance in light of the various headlines that were coming our way. For one thing, the Federal Reserve painted a relatively upbeat picture of the US economy going forward, saying that consumer and business sentiment was rising, inflation had increased and that labor markets remain tight. Despite all this, the central bank gave no indication as to when it would next move on rates, something that should have done a bit more for gold on the upside than it did. Other markets did not do much in the wake of the release either, although the dollar did weaken slightly in the aftermath of the statement. In the credit markets, investors are rightly sensing that the Fed will likely be sidelined at least through June (this according to CME futures), as a March rate hike looks increasingly unlikely given the lack of in-depth macro policy formulation that could conceivably come out of the Trump White House by then. Yields on the 10-year Treasury note fell only by 7/32 basis points to yield 2.48%.