Will Commodities Rise on Wednesday or Plummet?

[frugi]

The fed is hiking interest rates at 2pm Eastern on Wednesday.....this is a first in almost 10 years.

I wonder how the markets will react; specifically gold and silver.

http://www.marketwatch.com/story/what-time-is-the-fed-decision-2015-12-14

[JJM]

Here's my .02...

Short term reaction one way or another, won't matter several weeks (or months) from now. Deflationary pressures and strong dollar still in place. Black swan at some point in future will turn prices around though.

Many PM fans will have given up hope prior to then however.

Were I to buy any of these barbaric relics, I would wait longer.

[InfleXion]

It feels easy to get on board with the idea that this will be the turning of the tide for the next leg up in the bull market, and that Gibson's Paradox will be relevant (positive interest rates are positively correlated to the price of goods historically), but it's hard to imagine electronic markets being sane unless there are failures to deliver. That doesn't seem like a stretch either though. The knee jerk reaction could also be counterintuitive. I suspect downside on speculation and upside later when effects settle in.

[beauanderos]

The fed is hiking interest rates at 2pm Eastern on Wednesday.....this is a first in almost 10 years.

I wonder how the markets will react; specifically gold and silver.

http://www.marketwatch.com/story/what-time-is-the-fed-decision-2015-12-14

The article does not implicitly state that they WILL raise rates. It is more fedspeak. It strongly implies that they will "is set" "the likely
rate hike" "is poised"... but that's not much different from how they have been jawboning the markets prior to this.

We will know when they make an announcement, despite the best pieces of augury produced by attention hungry newshounds whom,
after all, are just guessing.

After the dust settles, you can expect more of the same that we have seen for the last four years, although the trading channel might
nudge in either direction for a bit, before they go back to their tricks. Time to go to cash for awhile.

[IdahoCopper]

Fed might not raise the rate. They do get some of the effect that they want by merely saying the rate will go up. Its all upside with no downside when they do this.

We will see in a few hours.

[pennypicker]

I personally would like to see a rate hike followed by a stronger dollar and lower oil. We're still getting butchered here in California with ridiculous gas prices. The local Chevron here in town is $2.89 for self-serve regular--unbelievable

[Shazbot57]

I personally would like to see a rate hike followed by a stronger dollar and lower oil. We're still getting butchered here in California with ridiculous gas prices. The local Chevron here in town is $2.89 for self-serve regular--unbelievable

Here in the Midwest Gas is $1.79-$1.89 (was $1.69 last week). Your gas prices in CA have nothing to do with oil prices, but with the crazy taxes your overspending state government has enacted!

[frugi]

i filled up less than 2 weeks ago in Leavenworth, KS at $1.49 a gallon.

[frugi]

I personally would like to see a rate hike followed by a stronger dollar and lower oil. We're still getting butchered here in California with ridiculous gas prices. The local Chevron here in town is $2.89 for self-serve regular--unbelievable

Here in the Midwest Gas is $1.79-$1.89 (was $1.69 last week). Your gas prices in CA have nothing to do with oil prices, but with the crazy taxes your overspending state government has enacted!

[pennypicker]

I personally would like to see a rate hike followed by a stronger dollar and lower oil. We're still getting butchered here in California with ridiculous gas prices. The local Chevron here in town is $2.89 for self-serve regular--unbelievable

Here in the Midwest Gas is $1.79-$1.89 (was $1.69 last week). Your gas prices in CA have nothing to do with oil prices, but with the crazy taxes your overspending state government has enacted!

You got that right!!!

[Dr. Cadmium]

Here's my .02...

Short term reaction one way or another, won't matter several weeks (or months) from now. Deflationary pressures and strong dollar still in place. Black swan at some point in future will turn prices around though.

Sounds good to me. Deflation is the word right now; if anything the Fed is making this move 2-3 years too late.

My prediction: this rate hike will matter little, and next year will bring more of this year: a slow but steady decline in the stock market and commodity prices. Oil and steel may have bottomed out - but every time I say that they drop a little more.

Right now the major stock indexes and gold have more room to fall than rise, as has been the case all year. Copper and aluminum have to drop to catch up with the steel and oil markets. Silver, as always, is near impossible to predict.

[Cu Penny Hoarder]

Prognosticating is fun, but the main thing I focus on is accumulating on large dips.

PMs did not drop like I thought they would on the interest rate news. The stock market rose on the announcement

There is no market anymore, it is totally controlled by computers/algos. We are living in bizarro world.

[beauanderos]

Prognosticating is fun, but the main thing I focus on is accumulating on large dips.

PMs did not drop like I thought they would on the interest rate news. The stock market rose on the announcement

There is no market anymore, it is totally controlled by computers/algos. We are living in bizarro world.

Uhmmmm... maybe you should check the boards again? They just gave up all of yesterday's gains, and more.

[68Camaro]

The drop is not good for flippers with stock, but Im digging the continued chance to stack for less. False perception of global health will lead investors to continue propping up paper markets which is exactly what the fed wants to achieve - but as it becomes more obvious that the patient is dying (coold take a few more years for that to become believed but it will happen quickly once attitudes change) people will look for exits all at once.

[silverstacker]

The drop is not good for flippers with stock, but Im digging the continued chance to stack for less. False perception of global health will lead investors to continue propping up paper markets which is exactly what the fed wants to achieve - but as it becomes more obvious that the patient is dying (coold take a few more years for that to become believed but it will happen quickly once attitudes change) people will look for exits all at once.

Exactly, as its just a matter of time until that one domino that eventually will fall, actually falls. I believe we can all agree that it's already tipping and that extra nudge will undoubtedly change everything. At that point there will be an immediate mass panic as "speculation" becomes confirmed as it eventually comes to fruition and then it's to late for them.

The average person will become very fiscally conservative no matter what political position they choose right now. Then to the exits everyone will run as fear continues to grow and grow until finally the government can't continue passing out the "cool-aid" as it can't be contained or even controlled by TPTB anyomre.

Until then, stay diligent, get your affairs in order and proceed with caution for the coming days that will change everything.

This is obviously IMO ( that I feel strongly about).

[InfleXion]

It's not a party you want to be late to, for sure. I'm happy to get my cost average down, and even some people I know are finally getting interested in stacking at these prices. The silver market is still a powder keg, and these low prices are more fuel for the fire. I find lately that I am content simply by having metal and am not concerned about profit. I know that if the system becomes too oppressive that I won't be dependent on it.

[Recyclersteve]

I personally would like to see a rate hike followed by a stronger dollar and lower oil. We're still getting butchered here in California with ridiculous gas prices. The local Chevron here in town is $2.89 for self-serve regular--unbelievable

Part of that is the taxes you pay in Calif.- 60.75 cents/gallon (5th highest/gallon in the U.S.) plus 48.7 cents/gallon U.S. tax. So, over $1.09 in taxes- it's hard to imagine that getting reduced anytime soon. Data per Wikipedia.