From the Trading Desk
Gold traded lower for four consecutive days and looked like it was on the verge of collapsing below trendline support at $1,225 yesterday. This was all until the FOMC statement came out at 11 AM PST and completely reversed gold’s fortunes. The FOMC left rates unchanged and lowered the projected number of rate hikes from three to two. The Fed cut 2016 GDP projections by .20% to 2.20% and trimmed 2017 GDP projections by .10% to 2.10%. Apprehension over global economic and financial developments and the associated potential collateral damage from them appear to be the chief reasoning behind the dovish FOMC statement.
Market participants were expecting a more hawkish FOMC statement and the markets reacted accordingly. The USD tanked while gold skyrocketed before finally slowing down in the low $1,260s. Resistance is intact at $1,280 while solid support remains at $1,225. Silver is finally making some moves of its own but encountered sizable selling around $16. This is the near term target that needs to be cleanly broken in order to attract fresh buying.
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About Doug EberhardtDoug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
Disclosure:
Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with capital you can’t afford to lose. This is neither a solicitation nor an offer to Purchase/Sell futures or options. No representation is being made that any account will or is likely to achieve gains or losses similar to those discussed in this outlook. The past track record of any trading system or methodology is not necessarily indicative of future results.
All trades, patterns, charts, systems, etc. discussed in this outlook and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author.