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Gold Ticks Up Ahead of Fed Policy Decisions While Inflation Continues to Roil Markets

December 13, 2021 – Inflation remains the primary concern for the markets as officials finally concede their “transitory” narrative was all wrong.  On Wednesday, Fed Chairman Jerome Powell will deliver the FOMC announcement and release November retail sales data, the NAHB home builders’ index and business inventories for more indications on the state of the economy.  In anticipation of the Fed’s Wednesday press conference, equity markets are slipping a bit and gold has moved a bit higher this morning.

Adding to the concerns of investors are new uncertainties for the global economic recovery in light of the omicron variant of the coronavirus and how governments will respond.  New or expanded lockdowns would be a big drag on growth and these concerns are also contributing to today’s drop in stock prices and the more industrially sensitive precious metals, platinum and palladium.

In the crypto market, the flagship digital currencies, Bitcoin and Ethereum are getting crushed this morning.  Bitcoin is down close to 3% and Ethereum’s price has dropped over 4%.  Both are failing to perform as inflation hedges and Bitcoin has traded sideways for the past 9 months.  With Bitcoin struggling to breakout to the upside, some money in this asset may return to gold or reduce the volume of funds going into Bitcoin which historically would have found its way into gold.