Precious metals continue to surge this morning, adding to substantial gains Wednesday afternoon. Gold prices rocketed $30 higher since the Federal Reserve Open Market Committee meeting yesterday, in a "sell the rumor, buy the fact" trade that was anticipated by some market watchers.
Silver is following close behind, having gained 50 cents an ounce the last two days.
While some analysts were expecting the "sell the rumor, buy the fact" move, its intensity hinged on post-meeting statements by Fed Chair Janet Yellen. Yellen came through for precious metals bulls, with statements that, while not exactly dovish, were less aggressive than many had hoped for. Many were expecting the Fed to upgrade its economic outlook for the US economy, something that did not happen.
As a result, the US dollar crashed to a five-week low after the speech, assisting precious metals' impressive gains. The falling dollar combined with an unexpected drop in US crude stockpiles to send oil futures 2.4% higher yesterday. Pressure on petroleum could increase tomorrow, as Baker Hughes releases its weekly active oil rig count. The oil well count has risen nine out of ten weeks this year, adding a total of 92 active rigs so far in 2017.
Back to today's markets, stocks worldwide celebrated the Fed's move, posting sizable gains. Energy and financial stocks out-performed, due to higher oil prices and interest rates, respectively. Wall St is retracing yesterday's gains, in most part caused by a more than 5% drop in drugmaker Biogen, after the company's stock was downgraded by Morgan Stanley. This pulled other healthcare stocks lower, offsetting gains in bank and tech stocks.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product