Shares in precious metals miners Randgold Resources (RRS), Fresnillo (FRES) and Polymetal (POLY) are among the major UK 100 beneficiaries of the US Federal reserve holding off from rising rates last night, at least for another few months. The Fed’s message was clearly designed to be a hawkish hold (“be prepared, it’s coming”) with talk of improved economic confidence and a handful of dissenters wanting to hike immediately. This would normally see the US Dollar rally, however, downgrades to the FOMC’s economic growth projections and revised expectations for only two hikes next year (versus three previously) suggests uncertainty within the ranks.

Investors are wondering whether the Fed will be in a position to hike rates at all in 2016. December is now the only real option due to November’s meeting being just days before the US election (Yellen says no influence but we refuse to believe that) and no press conference scheduled. Market-implied probability, however, has only risen as far as 60%. Not much better than evens. Traders are as unsure as ever. Gold and Silver prices are thus trading their highest since 8/9 Sept, benefiting from an uncertainty-inspired USD sell-off (close to week lows), traders taking advantage of a handsome translational gain in buck-denominated commodities.

Note mining peers focused on base metals actually topping the UK index as Oil pushes on (another US stockpile drawdown), copper delivers another breakout (china confidence) and bounces persist for the quartet of aluminium, iron ore, nickel and zinc.

Mike van Dulken, Head of Research, 22 Sept