Alasdair Macleod: The fateful date

By Alasdair Macleod
GoldMoney.com, St. Helier, Jersey, Channel Islands
Thursday, March 9, 2017

Caesar: What sayest thou to me now? Speak once again.
Soothsayer: Beware the ides of March.
Caesar: He is a dreamer; let us leave him: pass.

This famous advice, according to Shakespeare, was ignored with fatal consequences for Julius Caesar. Markets may be being similarly complacent ahead of this anniversary date next week. The Fed has signaled that it will raise interest rates at the FOMC's March meeting, timed for the same day. It so happens that this fateful date coincides with the end of the suspension of the U.S. debt ceiling. Dare Janet Yellen raise rates at such a sensitive juncture?

We shall see. But it is worth pointing out that gold rose strongly following the last two rate rises. It is likely that it was a "sell the rumour, buy the fact" response, and was also impelled by being the other side of the dollar trade. And the last time debt brinkmanship came up was with an agreement between the president and Congress to suspend the debt ceiling in end-July 2011, following which gold rose $200 in the ensuing weeks. ...

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