Gold & Silver Look To Go On Offensive After Morning Losses As Fed Holds Interest Rates Steady

Gold & silver are looking to recover their late morning losses as Powell’s set to give a presser at 2:30 p.m. EST (watch it here)…

(by Half Dollar) What has happened since the Fed’s last FOMC?

Oh, just the stock market roaring back to record highs and the US job market suddenly booming, and apparently, even though Main Street is burning to the ground right now, and quite literally too, that pesky little detail affects neither the stock market nor the job market.

All of this caused heavy gold and silver “selling” last Friday, June 5th, and it caused the gold & silver bears to come out of the woodwork:

We can clearly see, however, that gold & silver, post-Friday lows, haven’t bought into the mainstream narrative of a healthy stock market or a healthy job market, and as such, the precious metals have been grinding higher ever since.

Fast forward to today, at 2:00 p.m. EST, and the Fed’s June FOMC Statement has just been released, the contents of which should come to nobody’s surprise (full statement pasted below):

The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.

The coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world. The virus and the measures taken to protect public health have induced sharp declines in economic activity and a surge in job losses. Weaker demand and significantly lower oil prices are holding down consumer price inflation. Financial conditions have improved, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.

The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term. In light of these developments, the Committee decided to maintain the target range for the federal funds rate at 0 to 1/4 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.

The Committee will continue to monitor the implications of incoming information for the economic outlook, including information related to public health, as well as global developments and muted inflation pressures, and will use its tools and act as appropriate to support the economy. In determining the timing and size of future adjustments to the stance of monetary policy, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

To support the flow of credit to households and businesses, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities at least at the current pace to sustain smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions. In addition, the Open Market Desk will continue to offer large-scale overnight and term repurchase agreement operations. The Committee will closely monitor developments and is prepared to adjust its plans as appropriate.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Patrick Harker; Robert S. Kaplan; Neel Kashkari; Loretta J. Mester; and Randal K. Quarles.

Dang oil holding down consumer prices!

After being walked-down this morning, beginning at approximately 10:30 a.m. EST, here’s the price action in gold & silver the moment the Fed’s statement “hit the tape”:

There’s not much there one way or another.

For now.

Several minutes in, and it looks like the precious metals are wanting to go on the offensive:

To reclaim earlier losses, and then what?

Fed Head Jerome Powell’s presser begins at 2:30 p.m. EST, for those who are so inclined:

His answers to “questions” can move markets.