OH NO! The FED might ruin my AUY gold miner stock!
They meet on Wednesday, and if they decide to raise interest rates sooner it will hurt commodities, especially precious metals. Here’s the lowdown from the big shots:
"*The mere prospect of a climb in U.S. interest rates has lifted the dollar to multi-month highs, and it may rise further if the Fed confirms on Wednesday after its policy meeting that a rate hike may come sooner rather than later.
*This would be bad news for commodities, analysts and investors said, due to their strong negative correlation with the U.S. dollar.
*Precious metals may be the most susceptible, as gold prices in recent days have shown their strongest negative correlation with the dollar in two years, at over minus 0.94, indicating a nearly matching fall in gold as the dollar rises.
*Silver and platinum have also displayed strong negative correlations, suggesting the precious arena could suffer as a whole if the dollar gains.
*”Gold and silver are the most sensitive to dollar moves,” said Victor Thianpiriya, an analyst at ANZ Singapore. “The biggest concern for gold right now is the dollar strength. The markets are positioned for something that could be a little bit more hawkish (from the Fed). If that is confirmed, we will see some more dollar strength.”“