Does Fed Know Something Gold Investors Do Not Know?

The Fed doubled down on its dovish stance. What card will gold play now?

Fed Remains Patient

Yesterday, the FOMC published the monetary policy statement from its latest meeting that took place on March 19-20th. In line with the expectations, the US central bank unanimously kept its interest rates unchanged. The federal funds rate remained at the target range of 2.25 to 2.50 percent:

The Committee seeks to foster maximum employment and price stability. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 percent.

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US Budget Deficit And Interest

By David Haggith – Re-Blogged From Gold Eagle

Powell’s Testimony & The ECB Meeting?

By Arkadiusz Sieroń – Re-Blogged From Gold Eagle

Powell’s testimony before the Congress is behind us. The ECB meeting is ahead of us. Will Draghi support the gold prices after recent declines?

Gold Falls Below $1,300

Gold bulls might be disappointed. The upward trend apparently ended. As one can see in the chart below, gold fell below $1,300 on Friday.

Chart 1: Gold prices from March 1 to March 4, 2019

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Tesla May Not Make It Past Q1

By Ener Tuition -Re-Blogged From Seeking Alpha

“In Q3 last year, we were able to make a 4% profit. While small by most standards, I would still consider this our first meaningful profit in the 15 years since we created Tesla. However, that was in part the result of preferentially selling higher priced Model 3 variants in North America. In Q4, preliminary, unaudited results indicate that we again made a GAAP profit, but less than Q3. This quarter, as with Q3, shipment of higher priced Model 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and some luck, to target a tiny profit.”

“However, starting around May, we will need to deliver at least the mid-range Model 3 variant in all markets, as we need to reach more customers who can afford our vehicles. Moreover, we need to continue making progress towards lower priced variants of Model 3. Right now, our most affordable offering is the mid-range (264 mile) Model 3 with premium sound and interior at $44k. The need for a lower priced variants of Model 3 becomes even greater on July 1, when the US tax credit again drops in half, making our car $1,875 more expensive, and again at the end of the year when it goes away entirely.”

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Fed Statement Commentary

By Peter Schiff – Re-Blogged From Gold Eagle

While some may have been confused by Fed Chairman Powell’s circular statements in yesterday’s press conference, the takeaway should be abundantly clear: the period of Fed tightening, is over. The Fed will now hold steady on interest rates, and when they move again, they are more likely to lower rates than to raise them. And while the Fed’s program of balance sheet reductions is technically still underway, Powell made it clear that the program is no longer on “automatic pilot” and that the $50 billion per month of bond sales will likely diminish, and ultimately, conclude much earlier than anyone had predicted just a few weeks ago.

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Stock Buy-Backs Go Bust

By Michael Pento  Re-Blogged From Silver Phoenix

The perfect storm of zero percent interest rates that existed concurrently with a debt-disabled economy lured executives at major corporations into a decade-long stock buyback program. The Fed pumped money into the economy thru its various Quantitative Easing programs to force interest rates near zero percent, with the expectation corporations would borrow money at the lowest rates in history and then invest in their businesses in the form of Property Plant and Equipment (capital goods). This in turn would expand productivity and help foster a low-inflation and strong growth environment.

But many corporate executives found a much more enticing path to take in the form of EPS manipulation. That is, they boosted both their companies share price and, consequently, their own compensation, by simply buying back shares of their own stock.

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What Impact Are The Federal Reserve’s Actions Having On Peripheral Markets?

By Trey Reik – Re-Blogged From Gold Eagle

Maurice Jackson: Welcome to Proven and Probable. I’m your host Maurice Jackson. Joining us for a conversation is Trey Reik, senior portfolio manager with Sprott USA.

We’re delighted to have you here today to discuss the Federal Reserve’s impact on peripheral markets. Mr. Reik, the Fed is in the process of implementing a dual policy of rate hikes and balance sheet reduction, which appear to have a duplicitous effect on peripheral markets. What are your thoughts on this dual policy and what can we expect from Chairman Jerome Powell during his tenure?

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