Precious Metals Picked Up Momentum Following FOMC Update

As expected the U.S. Federal Reserve raised interest rates for the third time this year on Wednesday and left intact its plans to steadily tighten monetary policy, as it forecast that the U.S. economy would enjoy at least three more years of growth. The fact that the Fed didn’t come out as overly hawkish meant there was some positivity felt through emerging market currencies. Meanwhile, the dollar steadied against its peers as the small boost it received from the Fed interest rate hike faded, with a decline in U.S. Treasury yields reducing support for the greenback.

Crude Oil Moves Higher Over Supply Concerns

As of writing this article, Spot Gold XAUUSD is trading at $1196.55 an ounce up 0.17% on the day, while US Gold futures GCcv1 is trading at $1200.40 an ounce up 0.10% on the day. Spot gold prices have closed in a range between $1,210 and $1,190 an ounce since Aug. 28 and are expected to continue moving within this range during this week’s market hours.

The Fed statement did not have much of an impact on the dollar which suggests the possibility that the greenback could resume a little lower over the course of the next week or two, possibly giving precious metals an element of support. Spot Silver XAGUSD is trading at $14.437 an ounce up 0.80% on the day.

Oil prices rose by 1% on Thursday, pushed up by the prospect of tighter markets due to U.S. sanctions against major crude exporter Iran, which are set to be implemented in November.

Traders said oil markets were tightening ahead of Washington’s planned sanctions on Iran’s petroleum industry from Nov. 4. The Organization of the Petroleum Exporting Countries (OPEC) has a little spare capacity to make up for an expected shortfall in Iranian exports as Iran is OPEC’s third-largest producer. Reflecting expectations of lower supply from the Middle East, Oman crude futures on the Dubai Mercantile Exchange touched their highest in four years on Wednesday, briefly jumping above $90 a barrel. Oil prices remain in the Bulls domain amid concern that U.S. sanctions on Iranian crude oil exports will result in much tighter physical market conditions once they take effect in November as analysts believe markets could still be underestimating the supply crunch from Iran sanctions. Spot Crude WTIUSD is trading at $72.56 up 0.35% on the day.