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What’s Next For Gold Prices As Fed Minutes Take Center Stage?

May 25, 2022

New York (May 25th) After an explosive start to the week, Gold prices have pulled on routine profit-taking as trader’s attention now shifts to the minutes of the Federal Reserve’s latest monetary policy meeting.

Commodity Markets Fundamental Analysis

Earlier this month, the U.S Federal Reserve raised interest rates by 50-basis points – the biggest and most aggressive rate hike in 22 years against a backdrop of the largest war on European soil in almost 80-years and the fastest rise in inflation seen in over 41-years.

Since that pivotal policy meeting, Fed Chairman Jerome Powell has signalled increases of a similar magnitude – half a percentage point in June, July and possibly September – sending shockwaves through shockwaves through the global equity markets and heightening expectations of an economic slowdown.

Following this month’s rate hike, global equity markets slid into bear-market territory, with the S&P 500 plummeting 22%, whilst the Nasdaq fared even worse, tanking over 30% from recent highs.

Meanwhile, the most prominent sector benefitting from the current environment is Commodities.

As global equity markets fall deeper in bear-market territory, bullish sentiment across the commodities markets has continued to go from strength to strength – as they are typically viewed as one of the most safest and reliable hedges against economic risk, inflation and recession.

On that point, it comes as no surprise that a total of 27 Commodities ranging from the metals, energies to soft commodities have tallied up astronomical double to triple digit gains, already within the first 5 month of 2022.

And this is just the beginning!

Looking ahead, while Gold prices remains vulnerable to routine profit-taking in the near-term – it goes without saying – the fundamental backdrop for precious metal remains extremely bullish in the long-term.


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