What’s Next For Commodities As Fed Hiking Cycle Looks Done

U.S. Nonfarm Payrolls Fall Short of Expectations, Casting Doubt on Interest Rate Hikes

U.S Nonfarm payrolls increased 150,000 in October – less than forecast and barely half of September’s revised figure of 297,000. While the unemployment rate climbed to 3.9% and monthly wage growth slowed.

Labour market numbers are always the last thing to turn in an economic cycle so the softening in employment, wage growth and the rise in the unemployment rate makes it all the more likely that the Federal Reserve won’t hike interest rates again.

The report comes after Fed Chair Jerome Powell hinted the U.S central bank may now be finished with the most aggressive tightening cycle in four decades after it held off on raising interest rates for a second consecutive policy meeting on Wednesday.

The Federal Open Market Committee voted to hold interest rates at a 22-year high within the current range of 5.25% to 5.50%.

After Friday’s data release, traders marked down chances of a rate increase in coming months and boosted bets on an earlier cut next year – a move which sent Commodity prices across the board surging back towards recent highs.

Commodity Prices on the Rise: Implications of the Fed’s Stance on the Market

One of the biggest beneficiaries of the news was undoubtedly Gold. The precious metal rocketed above $2,000 an ounce within minutes of the data being released.

Gold prices have been on an unstoppable run, rallying from near the $1,800 level at the beginning of October to a six-month high of $2,000 an ounce – not once, not twice, but on multiple occasions over the past month.

The bullish momentum also split over into other commodities with Silver, Platinum, Uranium, Sugar, Coffee, Cocoa and Orange Juice prices soaring to fresh multi-month and multi-year highs.

The big question now is has the Fed just given a green light for Commodity prices to continue their upward surge?

Only time will tell, however one thing we do know for certain is that it won’t take much for Commodity prices to move significantly higher in this current macro-environment and breach new record highs in the coming weeks and months ahead.

That’s welcoming news for the Commodity bulls, but painful for anyone sitting on the sidelines, who must now decide how much FOMO they can handle.

Gold Price Forecast

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions: