Commodities Quarterly - Can FED events help predict gold price movements?
- In analysing the predictive power of various Federal Reserve calendar events, we found that Fed Chairman testimonies to Congress can be used as leading indicator for gold price movements.
- FOMC meetings, FOMC meeting minutes releases and generic speeches by Fed members or their Chairman have no statistical impact on gold.
- This quarter, we test whether Federal Reserve calendar events – such as public speeches delivered by the Fed Chairman or testimonies to Congress – can be used as a leading indicator to predict gold price movements in a statistically significant way. Of the dozen different events we tested – spanning the period from the beginning of this century until the middle of May 2012 – only two were found to bear any predictive power: former Fed Chairman Alan Greenspan’s speeches and Fed Chairmen testimonies to Congress.
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