From Kris Sayce – Port Phillip Insider (AUS) –
After taking a beating for a week, gold has rebounded this morning — if only slightly.
You know the reason for the gold price fall. Investors think the US Federal Reserve will raise interest rates in December.
That may happen. Or it may not. Your editor is sceptical about the chance of any Fed rate increase.
We continue to see the flaw in the market’s view. The market is trying to predict a future event based on market opinions from two, three or four months ago.
In Port Phillip Insider last week, we pointed out that economic data was stronger for part of August and September. But that may only be because in July, there were very low expectations of an interest rate rise this year.
Today, the market has factored in a 64.3% chance of a Fed rate rise in December.