There were three dissents among the voters in this FOMC meeting which in itself is a bit unusual but the fact that two came from the “Hawkish” side and one from the “Dovish” side shows the wide range of opinions on the economy.
For the U.S. consumer the economic boost provided by lower gasoline costs is hitting at the perfect time. The Federal Reserve just ended their extensive QE stimulus program at the end of October with hope the economy could stand on its own.
OPEC’s decision to refrain from action had an immediate effect on crude oil prices. Prices sunk as it became clear Saudi Arabia is more concerned with losing markets share than the pressure low prices are putting on its cartel partners.
At the moment it seems that the supply deficit in silver has people focused on getting a hold of as much physical silver as possible. With paper prices of silver at four and half year lows, it will be interesting to see how the price reacts to a lack of physical silver
Gold and silver are feeling the pressure of the combined drag of deflationary fears in the Eurozone, a slowing Asia and a stronger U.S. dollar. Gold finished the month of October down 3.3% and Silver down 5.6%.
Brent futures are trading at levels not seen since 2010, leaving traders asking why? Analysts are pointing to a grimmer economic outlook globally. However, the current situation can be seen more in terms of excess supply than weakening demand.
While many of the consequences of stimulating economic growth through currency devaluation and cuts in interest rates are known and intended, some are not. In the case of Japan’s lost decade, for example, a depressed currency and low interest rates led to carry trading.