As mentioned in yesterday’s current thoughts, the Fed kept things status quo, tapering another $10 billion. Here is what I said about market makers and what they would do with the price of gold today.
Tomorrow’s announcement will give us some insight into what will happen next with the metals. I’m not really looking for big change in what the Fed has to say and I will repeat, I am not expecting any moves higher in rates. This doesn’t mean that market makers, like they did today, will not try and shake investors out of their longs or shorts in an attempt to profit. That’s what they do best.
Indeed that’s what we saw today after the Fed announcement as circled in white in the chart below, dropping it about $8 before bringing it up to flat. Presently it is down $5.80 residing at $1,230.10.
Gold Price Volatility
The Dollar shot up at the same time gold fell, then reversed as gold rose as seen in the chart below. Yes, there is a correlation as there has been since 2011. However, this is only one indicator I follow.
Dollar Chart
Another indicator I follow gives me the reality of this non-event by the Fed, the 10 year Treasury yield which also showed the same volatility before ending up basically flat.
10 Year Treasury
And here’s what you need to know. Gold is still poised to fall after this non-event by the Fed in keeping things status quo. Next up on the slate is the vote concerning Scotland which I think will be another non-event.
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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
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