The 2016 market gold rush may be coming to a screeching halt. Gold sold off hard following an unexpectedly hawkish Fed minutes release on Wednesday, and the metal hit new three-week lows in early Thursday following a hawkish follow-up interview by Richmond Fed Chair Jeffrey Lacker.
Lacker told Bloomberg the market misconstrued the Fed’s decision not to raise interest rates in April.
A late-April Reuters poll showed that only around 60 percent of economists expected the next Fed rate hike to come in June. After the Labor Department subsequently reported the weakest U.S. payroll number in seven months, many assumed the chances of a June rate hike had fallen even lower.
According to Lacker, he pushed for an April rate hike and believes there is a strong case for a June hike. In addition, he said he would support a total of four rate hikes by the end of the year.
The news sent gold and tumbling on Thursday. The SPDR Gold Trust (ETF) GLD was down another 0.7 percent on Thursday after falling 1.7 percent on Wednesday. Direxion Shares Exchange Traded Fund Trust NUGT was down about 1 percent. Direxion Shares Exchange Traded Fund Trust JNUG was…
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