Gold Prices Hit New 2024 High As Fed Hints At Revival of ‘Operation Twist’

Commodities Soar on Fed’s ‘Operation Twist’ Hint

To quote analysts at GSC Commodity Intelligence – macro opportunities are everywhere and they are here in abundance. That’s one of the most lucrative trends of the current financial climate that we find ourselves in right now!

And guess what? This week is about one thing and one thing only: It’s all about the macroeconomics with trader’s attention firmly focused on the U.S Federal Reserve.

Last week, Federal Reserve Governor Christopher Waller – one of the central banks most influential voices – dropped a bombshell on the markets by suggesting that he would like to see two key developments in the Fed’s portfolio.

Firstly, the Fed’s agency Mortgage-backed Securities holdings going to zero.

Secondly, a shift in Treasury holdings toward a larger share of shorter-dated Treasury securities.

In other words, Fed Governor Christopher Waller hinted that he would like to see the Central Bank revive ‘Operation-Twist’ in order to reassert stronger control over interest rates at both ends of the yield curve. Essentially, that’s the Fed extending Quantitative Easing without actually calling it Quantitative Easing.

According to GSC Commodity Intelligence – the last time, the Federal Reserve rolled out ‘Operation Twist’ in 2012 – they unleashed an explosive money-making storm that sent Commodity prices across the board from the metals, energies to agriculture skyrocketing to fresh multi-year and all-time record highs.

Waller’s comments ignited a scorching rally sending Gold prices blasting above the key $2,100 an ounce mark for first time in 2024.

The bullish momentum also split over into other Commodities with Silver, Palladium, Platinum, Copper, Nickel, Zinc, Natural Gas and Crude Oil prices – soaring to fresh multi-month highs.

But the real star performer was Cocoa.

Cocoa prices have been on an unstoppable run this year, breaking new all-time record highs, almost on a weekly basis.

Last week, Cocoa prices continued their red-hot rally, surpassing $ 6,884 per tonne to hit a new historic record high – notching up a whopping gain of over 300%, from this time last year.

Eyes on Economic Data and Powell’s Testimony for Commodity Direction

Looking ahead, this now positions a string of critical economic readings due this week as the key arbiter for where Commodity prices could go next. This includes JOLTs job opening figures, ADP private payrolls data and all-important February Non-Farm Payrolls Report.

Elsewhere this week, traders will be closely monitoring the outcome of Federal Reserve Chair Jerome Powell’s two-day testimony before Congress – which may shed more light into Fed Governor Waller’s comments about a potential revival of ‘Operation-Twist’.