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USAGOLD/Peter Grant/05-02-17
Gold remains defensive with the two-day FOMC meeting beginning. The yellow metal has extended modestly lower in early New York trading and silver is keeping pressure on the important 16.80 support level.
When policy is announced tomorrow, there is not expected to be any change. The guidance will be closely scrutinized in an effort to determine the likelihood of another rate hike in June, in light of the weak first-quarter growth and diminished inflation pressures. Fed funds futures continue to suggest the probability of such a hike at 67%.
There is some expectation that the Fed will reveal additional details on balance sheet normalization. There has been FedSpeak in recent weeks suggesting that process could begin later this year.
The Greek government has reportedly agreed to a new deal to unlock additional bailout funds. More austerity and higher taxes in exchange for moneys now to prevent default. This is a saga going back to 2009 and seemingly has no end.
The U.S. calendar is very light today, with just April domestic auto sales.
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