Gold prices produced a relatively tepid reaction after the Federal Reserve finally issued its first post-QE interest rate hike at the December meeting of the rate-setting FOMC committee. Prices edged down toward 2015 lows but a big-splash breakdown was noticeably absent.

This seems to reflect the widespread expectation of the hike prior to its announcement – traders were pricing in the probability of “liftoff” at close to 80 percent weeks before the meeting – as well as seasonal considerations. Indeed, traders’ apparent unwillingness to rock the boat with just two weeks left in the calendar year made for muted responses across the asset class spectrum despite the historic significance of the Fed’s rate increase.. Read Full Article