Gold price pausing ahead of highly anticipated FOMC outcome

New York (Dec 15) Gold and silver prices are steady to slightly lower in early U.S. trading Wednesday. The marketplace is in a pause mode ahead of one of the most highly anticipated central bank meetings in years. February gold was last down $0.50 at $1,772.10 and March Comex silver was last down $0.069 at $21.855 an ounce.

All of the major central banks hold monetary policy meetings yet this week, but the main focus is on the U.S. Federal Reserve FOMC meeting that began Tuesday morning ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. The FOMC is expected to announce the acceleration of asset purchases tapering, so the Fed can raise interest rates sooner, as the U.S. now has the hottest inflation in nearly 40 years. Specifically, the FOMC is expected to announce it will accelerate tapering asset purchases to $30 billion a month to wind the program down by March. Many analysts and economists believe two U.S. interest rate hikes will occur in 2022.

Global stock markets were mixed in overnight trading. U.S. stock indexes are also pointed toward narrowly mixed openings when the New York day session begins.

In other overnight news there was a stark assessment of the Covid virus and resulting supply chain disruptions heading into the new year. Broker SP Angel in an email dispatch today warned that "we expect the highly transmissible Omicron virus to significantly disrupt supply chains through Q1 next year. Each new dominant variant passes faster and more effectively than the last by their very definition, with Omicron as the latest and most complex variant to take over. While Omicron may prove to be a milder and less deadly virus it is still making people sick and it still takes time / weeks to recover. …We expect ongoing mine disruption to further hit metals production, exacerbating supply / demand deficits and lowering already low LME and SHFE warehouse stock levels." Other major industries may suffer the same fate in the coming months.

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