Advisor Metals Precious Metals Market Update for December 20, 2024

How gold hedged your investment portfolio this week

And what a week! The Federal Open Market Committee (FOMC) had their interest rate announcement on Wednesday. They reduced their benchmark interest rate by 1/4%. No surprise there. However, the statement accompanying that announcement said that they do not anticipate as many interest rate cuts in 2025. Then the DOW dropped over 1,100 points after the announcement.
On Friday, the FED’s favorite inflation gauge, the Personal Consumption Expenditures (PCE) Index increased again in November although at a slower rate. On a yearly basis, the overall PCE increased 2.4% and the core which the FED watches more closely and which excludes the volatile food and energy components increased 2.8% both above the FED’s 2% inflation target.

As we have been writing in this space for weeks, if not longer, there was no way the FED was going to be aggressive in their interest rate reductions when they could not even get inflation down to their 2% target.

I continue to comment that every economic report that comes in negative is discounted because it is “in line with expectations”. A bad economic report is a bad economic report.

I believe the powers that be knew a negative announcement from the FED was forthcoming. During my markets experience of the last 44 years, I have seen many times the markets telegraph significant moves in advance. The DOW was down nine days in a row before Wednesday which has not been seen since the 1970s.

This week, through Friday morning, the DOW is down 3.42% with gold down .80%, hedging the DOW’s decline and your investment portfolio. Silver is another story. It is down 3.29% this week. Some of my customers have purchased silver at these price levels. The gold/silver ratio is at 89.71 which usually portends a rally in silver.

Go to our website for a free gold and silver guide, for more information, or to contact me about making a purchase. www.advisormetals.com ira@advisormetals.com 626 788 5770.