Gold & silver tumble on hawkish Fed bets

“Risk more than others think is safe. Dream more than others think is practical.” — Howard Schultz, CEO of Starbucks

 

 

HEADLINES

 

 

• Dollar gains, euro recovers on better than expected data
• Yields edge higher as investors expect Fed to act on inflation
• Gold's 4th straight decline matches longest skid in nearly 7 months
• Oil rises 3% to one-week high after U.S. taps emergency reserves
• S&P 500 Stumbles as Rising Yields Trigger Tech Wreck
• Best Buy Tumbles as Increased Theft Worsens Margin Squeeze
• Fed minutes: Eyes on timing for a rate lift-off – Scotiabank

 

 

FOREX

 

 

Dollar gains, euro recovers on better than expected data

 

The dollar index held near 16-month highs on Tuesday after Federal Reserve Chair Jerome Powell was picked for a second term, reinforcing market expectations that U.S. interest rates will rise in 2022.

The euro bounced off of 16-month lows, meanwhile, helped by better-than-expected business growth in the region.

Powell’s renomination supports the view that the Fed is likely to begin raising rates in mid-2022, after ends its bond purchase program.

 

Yields edge higher as investors expect Fed to act on inflation

 

U.S. Treasury yields edged higher in choppy trading in a holiday-shortened week on Tuesday as investors prepared for the Federal Reserve to become more aggressive in fighting inflation after President Joe Biden nominated its chair Jerome Powell for a second term.

 

 

COMMODITIES

 

 

Gold's 4th straight decline matches longest skid in nearly 7 months

 

Gold futures settled lower Tuesday for a fourth straight session, with the precious metal falling to the lowest value in about three weeks, breaching the psychologically significant value at $1,800 again. December gold shed $22.50, or 1.2%, to settle at $1,783.80 an ounce, marking the lowest finish for a most-active contract since Nov. 3, FactSet data show. The four-day slide also matched the longest string of declines for the contract for the precious metal since the period ended April 30.

 

Oil rises 3% to one-week high after U.S. taps emergency reserves

 

Oil prices rose to a one-week high on Tuesday after a move by the United States and other consumer nations to release tens of millions of barrels of oil from reserves to try to cool the market fell short of some expectations.

The United States said on Tuesday it would release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain, to try to cool prices after OPEC+ producers repeatedly ignored calls for more crude.

 

 

STOCKS

 

 

S&P 500 Stumbles as Rising Yields Trigger Tech Wreck

 

The S&P 500 fell sharply Tuesday, as rising Treasury yields soured investor sentiment on sectors of the market with high valuations like tech. Tech and communications services – growth sectors of the market that tend to include stocks with higher valuation – fell out of favor as rising U.S. Treasury yields weighed on sentiment.

 

Best Buy Tumbles as Increased Theft Worsens Margin Squeeze

 

Best Buy Co. tumbled the most since the start of the pandemic as increased robberies by organized groups of thieves add to an array of profit pressures while Wall Street frets about the outlook for holiday sales. Burglaries range from dozens of people rushing into stores and grabbing merchandise to theft by smaller groups, some of them brandishing guns or crowbars, Chief Executive Officer Corie Barry told reporters Tuesday.

 

 

ANALYSIS

 

 

Fed minutes: Eyes on timing for a rate lift-off – Scotiabank

 

“A watchful eye toward discussions around timing lift-off for the policy rate. The meeting concluded that the FOMC "is prepared to adjust the pace of purchases if warranted by changes in the economic outlook" and so watch for a discussion around the criteria for doing so. A fuller discussion is likely at the December meeting.”

“There may be a limited discussion around lift-off timing, but here too the December meeting and its fresh dot plot will likely be more revealing. “

 

 

CHART

 

 

British pound / Swiss franc – 4-Hour Candlesticks

Source: GKFX Prime Metatrader 4

GBP/CHF has been consolidating, making a series of lower highs after breaking above the 20 DMA. A break above a downtrend line connecting those highs could see a resumption of the uptrend. - Prepared by Trading Writers*

 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

 

SOURCE

 

 

 

https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/fed-minutes-eyes-on-timing-for-a-rate-lift-off-scotiabank-202111230214
https://www.investing.com/news/commodities-news/oil-falls-on-expected-deal-to-tap-emergency-crude-reserves-2687550
https://www.investing.com/news/stock-market-news/sp-500-stumbles-as-rising-yields-trigger-tech-wreck-2688526
https://www.marketwatch.com/story/golds-4th-straight-decline-matches-longest-skid-in-nearly-7-months-2021-11-23?siteid=rss
https://finance.yahoo.com/news/best-buy-tumbles-joining-retailers-140752108.html
https://www.reuters.com/markets/us/yields-edge-higher-investors-expect-fed-act-inflation-2021-11-23/
https://www.cnbc.com/2021/11/23/forex-markets-dollar-jerome-powell-federal-reserve.html