December 31, 2018 -- Gold and silver prices moved sharply higher last week. Silver gained nearly 80 cents and gold jumped by $25/oz. The metals benefited from volatility in the equity markets and a falling U.S. dollar.

Program trading in stocks produced some wild price swings. Intraday moves on all four trading days included swings of several hundred points. Stock prices ended the week well above the prior week’s close.

Before Christmas, Treasury Secretary Steve Mnuchin called bank CEOs and officials at the Fed with concerns over falling stock prices. It appears his calls were heeded.

One takeaway from last week’s action is that the Fed may be willing to play ball with President Donald Trump and stop raising interest rates.

Stocks have spent most of the fourth quarter marching toward bear market territory. Many wondered whether the central bank would respond to rising pressure from the President. Last week, that question seemed to be answered.

Expectations about Fed policy are starting to shift in favor of an abrupt end to interest rate hikes. And metals prices are perking up.



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