15 December 2022 | Other

Aggressive Fed outlook puts pressure on gold and silver

The Federal Reserve's speech turned out to be much more aggressive than expected. In connection with this, there is a decrease in the prices of gold and silver on Thursday. There is still uncertainty in the precious metals market because of the likely increase in interest rates in the U.S. 

Fed Chair Jerome Powell expects that the U.S. interest rates are likely to peak at higher levels. And this is despite the fact that the increase this time was smaller and amounted to 50 basis points.

The inflation rate is still well above the Fed's 2% target threshold. According to Powell, this is the main reason for higher rates.

The U.S. central bank also announced its readiness to slow down economic growth and the country's labor market in order to fight inflation.

Analysts at ING in their note said that the Fed could soften its policy if it was sure that the inflation rate has really slowed down. And not just for one or two months, when the core inflation rate turned out to be better than the market predicted.

This year's increase in interest rates has been the strongest deterrent to the precious metals markets. This is due to the impact of interest rates on the increase in the opportunity cost of holding an asset.

Company MarketCheese
Brent sell
Period: 30.09.2026 Expectation: 250 pips
Brent crude sell-off targets $88.50
24 August 2026 34
Period: 30.09.2026 Expectation: 550 pips
Go short on SPX down to $7,600
24 August 2026 27
Period: 21.09.2026 Expectation: 2100 pips
Go short on USDCAD as dollar index hits three-month lows
21 August 2026 46
Period: 28.08.2026 Expectation: 1002 pips
GBPUSD is likely to climb further next week
21 August 2026 54
Period: 21.09.2026 Expectation: 950 pips
Buying AUDCAD up to 0.99250
21 August 2026 42
Period: 28.08.2026 Expectation: 540 pips
Brent crude is coming close to July highs
21 August 2026 44
Go to forecasts