(Kitco News) – The gold market is maintaining its buying momentum as the Federal Reserve expects to keep interest rates at current levels through 2023 as they look for economic growth to pick up.
As expected the Federal Reserve left interest rates unchanged within its zero-bound range. Although interest rates are expected to remain low, the central bank is slightly more optimistic on economic growth through the end of the year.
December gold futures last traded at $1,972.10 an ounce, up 0.30% on the day.
According to some commodity analyst, gold prices are reacting to the fact that the Federal Reserve is committed to letting inflation run hot.
“The committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time,” the central bank said in its monetary policy statement.
The Federal Reserve did note that economic activity is picking up but still remains below levels seen before the nation was deviated by the COVID-19 pandemic.
“The path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term,” the statement said.
Adam Button, chief currency strategist at Forexlive.com said that the Federal Reserve’s long-term outlook will continue to support the drive in equity markets as interest rates are expected to remain at current levels though 2023.
“For me, the 2023 forecasts are the real tell. They see 4.0% unemployment, 2.0% core CPI and still there’s an almost universal commitment to keep rates at 0%. That tells you everything you need to know about the Powell Fed. It’s a bonanza for risk assets,” he said.
However, he also said that he sees the gold market also doing well in this environment.
The following is a recap of the Federal Reserve’s economic projections.
In the latest interest rate projections, also known as the dot plots, the central bank’s median forecast is for interest rates to be around 0.1% this year through to 2023. The projections noted long-term inflation will come in at 2.5%, unchanged from June’s forecast.
Looking at growth, the Federal Reserve expects U.S. gross domestic product contract by 3.7% this year, up from June’s estimated decline of 6.5%. However economic growth is forecasted to be lower for the next two years. Economic activity is expected to increase by 4% in 2021, down from June’s estimates of 5%; the economy is expected to grow 3% in 2022, down from the previous estimate of 3.5%. In the first look for 2023, the central banks expects to see growth of 2.5%
The committee is also optimistic that it will see a lower unemployment rate for the next few years. For 2021, the unemployment rate is expected to hover around 7.6%, down from June’s forecast of 9.3%. The unemployment rate is expected to fall to 5.5% in 2021, and 4.6% by 2022, down from the previous estimate of 6.5% and 5.5%, respectively. By 2023 the unemployment rate is expected to fall to 4.0%.
The U.S. central bank is also forecasting higher inflation pressures to build. The projections show inflation rising 1.2% this year, up from the previous estimate of 0.8%; inflation is expected to rise 1.7%, up from June’s forecast of 1.6%. In 2022, inflation is expected to rise 1.8%, up from the prior projection of 1.7%. By 2023, the central bank expects inflation to rise to 2%.
Core inflation expectations, which strip out volatile food and energy prices, are expected to push to 1.5%, up from June’s forecast of 1.0%; for 2021 core inflation is expected to rise to 1.7%, up from the previous projection of 1.5% and inflation in 2022 is expected to rise to 1.8%, up from June’s forecast of 1.7%. The central bank expects core inflation to rise to 2% by 2023.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
