With nothing important happening in the market until the Fed speaks, here’s a quick reminder of how this afternoon works:
- If Jay Powell is viewed as too hawkish it means inflation is the big problem. That signals rate rises sooner rather than later, which makes the US Dollar stronger and is bad for gold.
- If Jay Powell is viewed as too dovish it means Omicron has taken over as the number one concern. That’s bad news for the world’s biggest economy and a strong deflationary signal, which is bad for gold.
- If Jay Powell is neither overly dovish or hawkish, gold has a chance of remaining unchanged.
Gotta love macroeconomics.